"They believed you can't mix rock, country, and rap, and that crossover is dead. I always knew it would work. And it will always work as long as you're really into it and like what you're doing." -- Kid Rock
NEW YORK ( TheStreet) -- It has been a strong start to 2013, with the S&P 500 (SPY) up nearly 4% thus far in January. Risk-on has certainly been the right call exiting last year and entering this one despite the fiscal cliff noise and continued fears over another collapse in equities.
Our ATAC models used for managing our mutual fund and separate accounts have stayed long stocks since late-November, and there are no near-term signs of intermarket deterioration just yet to warrant concern. This has become less of a risk-on/risk-off environment, and more of a risk rotation one.
Within that risk rotation appears to be an eclectic group of winners and losers. Every week I run a screen on the over 1000 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 1 month period. Take a look below for the latest results.The Extreme Winners this week are a mixed bad, with Vietnam (VNM) on absolute fire since December. Interest rate cuts, rising PMI, and expansion by companies looking for cheaper labor than what China has to offer has resulted in a near parabolic move in the country's equity markets over a short period of time. Turkey (TUR) has also been in a remarkable uptrend, nearly doubling off of the January 2012 low. Platinum (PLTM) has been performing well, in line with outperforming auto stocks as expectations grow for increased demand on the industrial side. On the alternative energy front, Solar (TAN)and Wind (PWND) continue to fare nicely on renewed subsidies by the U.S. government and higher Oil prices. Interestingly, Spain (EWP) and Italy (EWI) have also started off in a big way emblematic of the risk-on environment we are currently in. As to the Extreme Losers, quite a few currency pairs relative to the U.S. Dollar (UUP) are showing up. The Japanese Yen (FXY)has been the big story, given Prime Minster Abe's big push to reflate the third largest economy in the world.
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