On the back of the news out of Washington last night the
S&P 500 has continued its rally and has traded above the
all-time closing high of 1725, which it recorded last month. The
confirmation of the breakout would be a close above the previous
high when the bell rings at 4pm.
As the S&P 500 prepares to it yet a new record level there
is a growing number of ETFs that have already reached new
heights. In a strong bull market it is important to ride the
momentum of the ETFs that are showing relative strength. The ETFs
leading the market higher will likely continue that trend and
should be where investors look to invest their money.
Here is a short list of ETFs already trading at new highs.
iShares Russell Microcap Index ETF (NYSE:
The basket of over 1350 stocks continues to outperform its
larger peers with a gain of 34 percent this year. It should not
be a surprise that the smaller capitalization stocks are doing
well in a bull market as investors are willing to take on
Not only is the ETF hitting new highs prior to the S&P
500, it has also held up much better during all pullbacks in
2013. This is yet another signal of relative strength.
First Trust ISE Natural Gas Index ETF (NYSE:
The ETF has been on a tear recently and is up 29 percent since
the beginning of the year. A major reason for the outperformance
has been the expansion of the U.S. as a major player in oil and
natural gas via fracking. The ETF hit a new 52-week high in
September and continued higher right through the debt ceiling
The future of energy begins with the natural gas companies
that are able extract both natural gas and oil from the shale in
the U.S. Other than a short-term, overbought pullback, FCG looks
like it will continue to outperform.
SPDR Euro STOXX 50 ETF (NYSE:
The three countries that make up the majority of the ETF are
France, Germany, and Spain. All three are hitting new highs and
therefore there is no surprise FEZ is joining them on the list.
The ETF was able to breakout to the best level in over two years
last week and the rally has continued.
The ETF is now up 16 percent on the year and has plenty of
room to run to get back to the pre-crisis level. A short-term
pullback may be around the corner for the European stocks after a
big rally the last two months. However, that is not necessarily a
bad thing because it can be viewed as a buying opportunity.
As an investor and human being it is naturally more
comfortable to buy when an ETF is up and hitting highs. When it
comes to making money the best strategy is to buy on weakness.
Look for pullbacks in ETFs hitting highs and do not fear buying
when there is red on the screen.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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