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Commodity ETFs Need to Get Going

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( ETF Expert) --Greece might not take the bailout money? Okay, sell everything you've got, including that low-risk Vanguard Utilities Fund (VPU).

Greece is back on board? Very good, then buy Small Cap Australia (KROO) to profit from the "dollar carry trade."

Investors of all sizes -- individuals, advisers, money managers, hedge funds -- view risk differently in 2011. There's less focus on tolerable loss through diversification and asset allocation; instead, many endeavor to eliminate any and all downside... with questionable results.

Shifting away from a "buy-n-hold-n-hope" world isn't a bad thing. In fact, I built my asset management client base on avoiding catastrophic dot-com losses in the early 2000s, using stop-limit loss orders with exchange-traded index funds. That said, it would not have been possible to envision six-month periods in the markets where major benchmarks closed 2% higher or lower on a daily basis.

Perhaps unfortunately, the level of intra-day volatility neither benefits a "hold-n-hoper" nor an active steward. The few who may benefit from crazy intra-day price movement are those who "day trade." Not all day traders, though. For every prosperous day trader, there are hundreds of gamblers in search of a new game.

What can you do in a world where risk is a light switch in the "on" or "off" position? You can recognize that when the CBOE Volatility Index (VIX) is above 25, technical trends reign supreme.

Technically speaking, then, the price of Vanguard Total Stock Market (VTI) is above its 50-day trendline. It fell below in mid-July; it rose above in early October. And the day-to-day noise has little to say about a current uptrend for U.S. stock assets.

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SYM TRADE IT LAST %CHG
VWO $34.14 -1.40%
VTI $102.37 -0.59%
EWM $10.09 -0.69%
EWA $18.66 -2.60%
EZA $56.74 -0.73%

Markets

Chart of I:DJI
DOW 16,506.31 -136.70 -0.82%
S&P 500 1,973.25 -15.62 -0.79%
NASDAQ 4,803.1620 -25.1630 -0.52%

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