Three ETFs Frontrunning The Market
Exchange traded funds continued rallying Thursday as commodity prices surged, stocks climbed to a two-month high and corporate earnings beat views.
United States Oil ( USO ) and other ETFs tracking crude oil gapped up 3% to a two-month high on worries that conflicts in the Middle East could disrupt supplies. Fears over the Mideast outweighed data showing ample U.S. supply. For the week ended July 13, U.S. crude oil stockpiles of 377.4 million barrels are higher than average for this time of year, the U.S. Department of Energy reported. USO climbed a whopping 6% so far this week, logging its largest one-week gain of the year.
PowerShares NASDAQ Internet ( PNQI ) popped 2.77% afterEbay ( EBAY ) reported second-quarter profits and sales that eclipsed Wall Street estimates. Shares of the online swap meet soared 9% to a six-year high. IBD's Doug Tsuruoka reported Ebay's growth in Asia and Europe was strong and that the impact from Europe's recession wasn't as bad as thought.
The euphoria spread to online retail giantAmazon.com ( AMZN ), which surged more than 4%.
IShares PHLX SOX Semiconductor Sector ( SOXX ) and other chip-sector ETFs rose about 2%.Mellanox Technologies (MLNX) blew away analysts' estimates after hours Wednesday. As Patrick Seitz reported the Israeli chip designer is at the forefront of the cloud-computing boom.
PNQI and SOXX surged 2.1% and 4.4%, respectively, so far this week vs. a 1.3% return for the S&P 500.
In afternoon trade, theSPDR S&P 500 (SPY) was nearly flat at 137.48 after giving back most of its morning gains. It rose as much as 0.6% in intraday to a two-month high of 138.18. It appears to have hit price resistance near the same place it did on July 5, after which it fell below its 50-day moving average.
"Equities continue to consolidate within a large range. Though recent action has been constructive, an awareness of the bigger picture makes us take a skeptical view of any strength," Waverly Advisors told clients. "Be careful of increasing long exposure too quickly in the current environment. Tactical traders should stand ready to pursue shorts on any breakdown."
As IBD's Leaderboard shows the market's uptrend is questionable because of the number of distribution days it's experienced recently.
SPY faces key price resistance at $139 to $141 a share, where traders should short the market, according to Simon Maierhofer, founder of iSpyETF.com.
SPDR Dow Jones Industrial Average (DIA) was ahead just 0.12%. It also gave back morning gains.
PowerShares QQQ (QQQ), a basket of the largest 100 nonfinancial stocks on the Nasdaq, added 1.09%.
IShares MSCI EAFE Index (EFA), tracking developed foreign markets, climbed 0.79%.
IShares MSCI Emerging Markets Index (EEM) rose 0.77%.
Follow Trang Ho on Twitter @TrangHoETFs .