The ETF Scan we run daily continues to rise as the number of funds meeting the criteria of an uptrend continues to grow. Today I wanted to breakdown what is showing up in the scan relative to the current market activity. First the biggest rotation has been into the commodities. CORN, DBA, JO and other has been a benefactor of the speculation relative to the drought. The impact has also been in the Agriculture Business ETF, MOO as well. Monsanto, Mosaic and Agrium have all moved higher on the data within the sector. This remains one of the key leaders in the Commodity Sector overall.
Crude oil has bounced from $78 to 89 a barrel and energy stocks are starting to bounce with the commodity. This is worth our attention as IEZ, OIH and other oil services ETFs jump up on the list. XOP, SPDR Gas & Oil Exploration ETF has made a solid move higher as well. Thus, now is a good time to dig into the ETFs and look for the leadership to take advantage of short term.
The broad index ETFs hae made a splash of late onto the list as well. SPY, DIA, IWM and QQQ have all shifed to an upside momentum showing a broad based rally in the markets. The Small Cap stocks were leading, tested, and are now pushing back into a leadership role for the broad markets.
Technology made a solid move on Wednesday and made an appearance on the list for the first time in several weeks. This is a welcome sight if the broad markets are going to maintain any consistent advance. Semiconductors (SMH, SOXX, etc.) made a solid push higher on Wednesday to lead the broad markets. This is a sector to watch along with Networking (IGN), Internet (FDN) and Software (IGV), which are not on the list currently, but making moves based on the bounce off the lows on Wednesday.
Industrials (XLI) and Basic Materials (XLB) both made token appearances on the list with solid gains on Wednesday, but they still have plenty of work to do if the trend in the sectors are going to take on some leadership. They both posted solid gains off the lows and are worth watching as all this unfolds. They have been news event driven on the recent moves making it a challenge to take any plays in the sector near term.
The global markets are showing up as well with the response on the upside in EFA and other broad international ETFs. Europe (IEV) and Germany (EWG) both have made a solid bounce of the recent test of support. The Emerging Markets (EEM) are worthy of attention as well making some solid moves. Mexico (EWW), Malaysia (EWM), Thailand (THD), Singapore (EWS) and others are making moves that warrant our attention as this all unfolds.
The bonds remains in the list depsite the recent rise in stocks. Treasury (IEF, TLT) bond fund remain strong on the upside and show money flow still favoring bonds short term.
Bottom line… money continues to find a home and remember that money likes speed and it will migrate to wehere it is treated the best… short term or long term. Stay focused and disciplined as this all unfolds.