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 Expert) -- There are a variety of ways to interpret stock market volatility. A rising CBOE Volatility Index (VIX) often typifies greater fear on the part of options investors such that they require protection against a monstrous selloff. A widening of the daily trading range on a popular benchmark may also be indicative of explosive moves to the downside or upside. Moreover, upward revisions to the average beta (think financials) can signal increasing risks to the broader markets as well. Relative strength is a lot like volatility in that there are different approaches for evaluating and discussing momentum. Some technicians use the Relative Strength Index (RSI) for looking at potentially overbought or oversold investments. An asset with an RSI above 70 may be viewed as "overbought" whereas one with a RSI below 30 is typically viewed as "oversold."
I've discussed weakness in resources-related country ETFs and resources-related sector ETFs for weeks. In my weekly ETF Expert Podcast, in fact, I have talked about the potential implications for Brazil ETFs, China ETFs, gold, materials and energy. Still, the general bias of most readers is to hear what is hot, rather than what is not. It is for this reason that I'm serving up three momentum winners. Each has moved from a modest Rsf percentile ranking (40-60) to the top decile (90-plus). In addition, each has a limited profile that warrants more discussion. 1. Market Vectors Gaming ETF (BJK). Does the world love to gamble? Even as global GDP is slowing dramatically? Apparently so. With a 40% tilt toward the U.S. and a heavy dose of China (20%), BJK has quietly put together a 15%-plus winning streak over the previous three months. Las Vegas Sands, Wynn Resorts and slots-leader International Game Technology are present and accounted for. Intriguingly enough, BJK has a reasonable P/E of 15 as well as an attractive dividend yield of 2.7%. 2. Global X FTSE Columbia 20 (GXG). Three months back, the notion of investing in a frontier fund like Columbia may have seemed foolish. With a heavy concentration in materials, a costly net expense ratio of 0.78% and diversification limited to 20 corporations, GXG's technical picture has defied the odds. In fact, it is one of a select few stock ETFs that hit a new 52-week high on Friday, April 20.
3. PowerShares DWA Technical Leaders (PDP). Search Dictionary.com for the word "irony" and you might see PDP listed next to the word. After all, PDP seeks to replicate the performance of the Dorsey Wright Technical Leaders Index -- and index which incorporates 100 U.S.-listed companies with potent relative strength. This ETF's quarterly rebalancing act makes it possible to succeed with large sector weightings in recently strong segments such as consumer discretionary; indeed, the 33% currently allocated to consumer discretionary corporations has likely played a key role in PDP's momentum.