Friday's action was nothing to write home about as the S&P
500, Dow Jones Industrial Average and the Nasdaq all made meager
gains. However, a broader view of things indicates this rally is
now stretching into its third month. Light volume or not, the bulls
seem to be in charge and the bears appear to have very little in
the way of ammunition to stop further upside.
Well, that might not be entirely true as the action in one of
next week's ETFs to watch indicates:
SPDR Barclays Capital High Yield Bond (NYSE:
) It may not be fair to say the just completed week was decidedly
risk-on in nature, but for the most part, riskier assets were in
fashion. That should have been good news for high-yield bonds and
ETFs such as the SPDR Barclays Capital High Yield Bond ETF.
Yes, JNK, the second-largest junk bond ETF, is trading within
spitting distance of its 52-week high. However, it is worth noting
the ETF closed slightly lower on the week and some analysts might
interpret that as a signal equities are ready to correct. It is
hard to put a timetable on such matters, but the sooner JNK can
reach a new high, the better: the longer this ETF just chops
around, the more vulnerable it is to retrenchment.
iShares Dow Jones US Technology Index Fund (NYSE:
) Alright, so everyone and his sister knows this already, but Apple
) reached a new all-time high Friday. The juggernaut now has a
market cap of almost $608 billion, that's an all-time record for
any stock. That is significant for IYW, the ETF with the largest
weight to Apple.
IYW is a cap-weighted ETF, meaning the larger Apple's market
grows, the bigger the stock's weight becomes in IYW. IYW allocated
23.4 percent of its weight to Apple as of the close of markets
August 16. Those looking for an ETF proxy on Apple need look no
further than IYW.
iShares Silver Trust (NYSE:
) The iShares Silver Trust notched a small gain this week, but
believe it or not, the volatile ETF has done absolutely nothing
over the past three months. SLV has been showing faint signs of
life recently and if the risk on trade is reborn in earnest, silver
should have some near-term upside. The risk/reward here is
favorable as a stop around $25.50 on SLV would be appropriate. That
is not much downside from SLV's Friday closing price.
Market Vectors Retail ETF (NYSE:
) Plenty of folks have been talking about the quasi resurgence in
retail and discretionary ETFs such as the SPDR S&P Retail ETF
) and the Consumer Discretionary Select Sector SPDR (NYSE:
). The real stud of the retail ETFs lately has been the Market
Vectors Retail ETF.
In the past 90 days, RTH has easily outpaced XLY and XRT.
Year-to-date, RTH is also the winner with a gain of over 17 percent
and the fund currently sports superior relative strength compared
to its rivals.
Home Depot (NYSE:
) and Lowe's (NYSE:
) combine for 12 percent of RTH's weight, giving the ETF some
exposure to a rebound in home builder equities. Until recently,
), the ETF's largest holding with an allocation of 11 percent, had
been a prime driver of RTH's returns.
Despite the recent decline in that name, RTH is one of the
stronger and most unheralded ETFs in the retail group.
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