Success is blocked by concentrating on it and planning for it . . . Success is shy -- it won't come out while you're watching"
-- Tennessee Williams
NEW YORK (TheStreet) - Much has happened in the past two weeks on the global front, clearly impacting price and market behavior in dramatic ways. Hurricane Sandy was highly damaging, the U.S. presidential elections have come and gone, and the world is waiting on a resolution to Greece's coming austerity vote and the U.S. fiscal cliff.
I have highlighted in my most recent Extreme Movers Message writings that big things appeared to be happening in the energy markets, and since then many seem to be taken by surprised by the size of the moves under way.
Every week I run a screen on the over 1,000 ETFs/ETNs I track to identify those areas of the investable landscape which are exhibiting extreme price behavior relative to their own respective 20-day moving averages.The idea is to see if there is a message happening beneath the surface of the market by looking at the opposite ends of winners and losers spectrum over a rolling one-month period. Take a look below for the latest results. I have been stressing quite a bit of negativity on natural gas given the surge in coal's outperformance, and it appears that natural gas has gone from being among the best, to among the worse, as the United States Natural Gas Fund LP ETF (UNG) weakened meaningfully. Note that quite a few energy plays are on the Extreme Losers list, as the Market Vectors Solar Energy ETF (KWT), and Market Vectors Nuclear ETF (NLR) performed badly in the last rolling month of trading. The breakdown in pharmaceutical (PPH), utilities (XLU), and telecom (IYZ) appears very much to be due to fears over dividend tax hikes under an Obama administration, which would alter the reasons for why money would be positioning into those areas of the stock market. The leaders across the board are dominated by China, which has pulled away from developed markets and began outperforming last month after severe weakness all year. Much of this may simply be a mean reversion trade given how depressed prices are, but it does appear money is optimistic of the coming leadership change and what that may mean in terms of stimulus. The move may be indicative of a meaningful breakout, and suggests that if one absolutely needs to be exposed to equities, China near-term may be the best bet. The bottom line? The market is loving China, and hating energy and dividends. The next few weeks will be key to see if the market is right. Until then, market risk-off remains in place. Our ATAC models used for managing our mutual fund and separate accounts remain very negative on equities, keeping us in bonds. Could a push back into Treasuries explain why dividend stocks and energy (under a deflation pulse) are weakening so much? We live in interesting times... At the time of publication, the author held no positions in any of the products mentioned. Follow Michael Gayed @pensionpartners This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV