This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Should You Abandon Consumer ETFs?

NEW YORK (ETF Expert ) -- As of Jan. 5, Consumer Discretionary ETFs became the weakest performing sector on a one-month rolling return basis. One week later, on Jan. 12, a high volume display of "selling on strength" further victimized the collective well-being of consumer stocks.

Nearly $200 million via block trading exited SPDR Select Consumer Discretionary (XLY) on Wednesday. The activity depleted XLY's assets under management by roughly 8.5%, and it occurred on 3x the normal trading volume.

Some folks may be quick to dismiss this trend. After all, four out of five of the high beta-sectors (i.e., tech, energy, materials, financials, consumer discretionary) are leading the market higher... exactly as they are expected to do. And it is entirely possible that a rotation into "financials" from "consumer discretionary" will prevent a January correction.

On the flip side, if financials do not continue to advance, an absence of participation by both financials and consumer discretionary might cause high beta sectors to capitulate. Indeed, the performance of SPDR Financials (XLF) over the next few weeks of earnings and dividend restoration will be crucial.

In the meantime, does it make sense to buy consumer stocks via XLY or iShares DJ Consumer (IYC)? I wouldn't. Post-holiday uncertainty, the Fed's five-year warning on "normal" job numbers, the eventuality of higher interest rates, the end of endless government stimulus, short-sale mania and a deleveraging public is enough to keep me focused on tech and natural resources ETFs.

You can listen to the ETF Expert Radio Show "LIVE", via podcast or on your iPod. You can review more ETF Expert features here.
TheStreet Tools
* Ex-Dividend Date Calendar
* Top-Rated Stocks
* Highest-Yielding Stocks
* 2011 Earnings Calendar
Disclosure Statement: ETF Expert is a website that makes the world of ETFs easier to understand. Gary Gordon, Pacific Park Financial and/or its clients may hold positions in ETFs, mutual funds and investment assets mentioned. The commentary does not constitute individualized investment advice. The opinions offered are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial or its subsidiaries for advertising at the ETF Expert website. ETF Expert content is created independently of any advertising relationships. You may review additional ETF Expert at the site.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
XLF $23.22 -1.28%
XLY $79.57 -0.92%
IYC $145.27 -0.68%
AAPL $95.18 1.64%
FB $117.43 -0.96%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs