ETF Midweek Peek

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.

By David Gillie

NEW YORK (ETF Digest) -- Another holiday week brought volume so low it's difficult to speak of the bulls in the plural. Nevertheless, the bull(s) continued the run with only minor setbacks on any bad news such as a widespread credit downgrade across Europe and some poor earnings reports.

Wednesday's housing data was the red cape to encourage the charge. This morning's (Thursday) data was a mixed bag with slightly improved employment data, but housing starts took the wind out of the sails of yesterday's housing data. CPI was basically flat and the Philly Fed was irrelevant on the ridiculous reports and revisions.

Top Performers this week

Our #1 and #4 top performers this week are a second derivative of $100/bbl oil prices. $100/bbl oil (and price increases at the pump) brings renewed interest in alternative energy. Solar being the most viable and TAN being the primary ETF for the solar industry claimed the top spot on conviction volume. PBW just went along for the ride in the sector. Home construction continues this week on strength, especially encouraged by the positive data on Wednesday.

Materials were lifted mostly for the holdings in copper. The downward trend in India and China encouraged Emerging Markets positions for a potential reversal. Tech appears to have been in a short squeeze drifting sector higher and taking the tech weighted Q's with it.

New Highs

Semis, the most heavily shorted segment of tech, experienced a short squeeze and traders quickly piled in for the move. Oil services are the top benefactor of high oil prices, being the producers of crude.

 

Biotech tends to be were traders go when they're unsure of where else to find capital gains. The move up in tech has brought QQQ up to the 52-week high resistance. The two primary homebuilder ETFs, ITB and XHB jockey for position in slight technical differences.

New Lows

 

No surprises here that the "mega-bears" are at new lows on the recent rally. The story here is, which ones. Tech and Emerging Markets didn't just drift down in an inverse relationship to the longs. There was heavy selling in these two inverse positions indicating a short squeeze.

This, in turn, shoved down the bears in the tech heavy QQQ. Small caps are the favored "risk off" position and as the rally continued (despite absence of volume), traders moved into small caps sending the leveraged inverses to new lows.

Unusual Volume

 

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