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 Digest) -- I didn't pursue a Master of Business Administration when I was younger; rather, I felt there would be more value in a Master of Science in Industrial/Organizational Psychology (a.k.a. "the psychology of business"). Why did I/O beckon more than the typical MBA track for financial professionals? In essence, the crash in October of 1987 had a profound affect on my sensibilities; I became keenly aware that the financial markets were more about fear and greed, less about projected earnings and widget sales.
Specifically, the iShares 7-10 Year U.S. Treasury Bond Fund ( IEF) can help you assess risk appetite. In fact, IEF has been travelling a very similar path as VXX has. With IEF above a 50-day trendline -- or an ongoing "hugging" of that trendline -- there's little reason to expect riskier stock ETFs to perform admirably just yet. My third recommendation for tracking fear is the PowerShares DB G-10 Currency Harvest Fund ( DBV). It is sometimes affectionately referred to as the "Carry Trade" ETF. In essence, DBV is a means for average investors to go long the three G-10 currencies with the highest interest rates while simultaneously going short the three that have the lowest interest rates. The intention is to mimic the effects of borrowing from low-yielding currencies to invest in high-yielding currencies. Right now, though, fear is palpable. Investors have been flocking to the perceived safety of the yen and the U.S. dollar; that is bad for the short position. Similarly, a long position in the Australian dollar and New Zealand dollar is less desirable in a world that doesn't quite trust the global financial system. It follows that the current price of DBV is below a 50-day and a 200-day moving average. With each of these three "fear indicators" suggesting pessimism, one needs to remain conservative. I continue to favor assets that should perform well, regardless of the questionable macro-economic environment. Look to yield producers such as Powershares Low Volatility (SPLV), JP Morgan Alerian MLP ETN ( AMJ) and iShares High Dividend Equity ( HDV).