This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

ETFs to Watch for Global Deflationary Signals

Stocks in this article: GLD SPY TLT XLY

NEW YORK ( FMD Capital Management) -- The stock market has been pretty choppy to begin the new year. Stocks have see-sawed up and down on weaker-than-expected earnings news and global economic reports that clearly have investors uneasy.

After a move of greater than 30% in the SPDR S&P 500 (SPY) exchange-traded fund last year, it can be an uncomfortable feeling to watch stocks consolidate near the highs. Right now the technical picture is still positive and the uptrend remains intact. However, the risk of a correction is still an ever-present concern.

A look back on a two-year chart of SPY shows that the market has now been above its 200-day moving average for more than a year now. That is a long stretch of time considering the volatility that we have experienced over the last decade. 2013 seemed to be an outlier year, with stocks receiving the gift of strong momentum on the back of outflows from commodities and fixed-income.

The natural ebbs and flows of the market dictate that we will eventually see a return of selling pressure that will shift assets in new directions. While I don't advocate trying to call a top in stocks, I think that it is a good idea to watch for signals of deflationary trends. This will allow you to make incremental shifts in your asset allocation within the framework of a risk management game plan. That way you can stay ahead of the curve and shield your portfolio from a portion of volatility.

The most well-known barometer of a shift from "risk on" to "risk off" behavior is long-term Treasury bonds. The iShares 20+ Year Treasury ETF (TLT) is typically a leading indicator of investors looking to shift money from stocks or cash to high quality instruments that favor a deflationary environment.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs