Defensives Get Their Turn, Sort Of
Defensives got the upper hand Thursday
as the tech-focused exchange-traded funds extended losses but held above their
lows. The jury’s still out on the Nov. 30 low, folks.
In the traditional bear hideouts, the
Consumer Staples SPDR
(
XLP |
Quote |
Chart |
News |
PowerRating) rose 1.5%, the Pharmaceutical HOLDR
(
PPH |
Quote |
Chart |
News |
PowerRating)
0.9%. Fairly noncommittal action. Again, if you trade intermediate term, this is
a time to keep updating your watch list and let the market make up its mind.
The top field of all charts in this
commentary uses a logarithmic price scale and displays a 50-day price average in
red. In cases where the displayed has traded long enough, the top field also
will exhibit a 200-day moving price average in black. In the second field, a
blue relative strength line represents the displayed security’s price
performance relative to the S&P 500. The third field displays vertical daily
volume bars in black with a 50-day moving average in blue for volume.
The financial funds tread water. The
Financial SPDR
(
XLF |
Quote |
Chart |
News |
PowerRating) added 0.2%, the Dow Jones Financial iShares
(
IYF |
Quote |
Chart |
News |
PowerRating)
lose 0.1%. Regional Banking HOLDR
(
RKH |
Quote |
Chart |
News |
PowerRating) gained 1.5% but remained well within
the prior session’s range. In other words, an inside day.
On the downside, the Internet HOLDR
(
HHH |
Quote |
Chart |
News |
PowerRating)
shed 4.4%, the Dow Jones Internet iShares
(
IYV |
Quote |
Chart |
News |
PowerRating) 4.2%, the Internet
Infrastructure HOLDR
(
IIH |
Quote |
Chart |
News |
PowerRating) 3.4%, the Technology SPDR
(
XLK |
Quote |
Chart |
News |
PowerRating) 3.3%, the
Nasdaq 100 Tracking Stock
(
QQQ |
Quote |
Chart |
News |
PowerRating) 2.2%, the Wireless HOLDR
(
WMH |
Quote |
Chart |
News |
PowerRating) 1.1%
The Semiconductor HOLDR
(
SMH |
Quote |
Chart |
News |
PowerRating) lost
2.0%, ahead of a revenue warning from Intel
(
INTC |
Quote |
Chart |
News |
PowerRating), the HOLDR’s heaviest
component
Exchange-traded
funds combine traits
of stocks and mutual funds. Like mutual funds, an ETF represents diversified
ownership in a number of different stocks, greatly reducing company-specific
risk. Like stocks, ETFs trade on exchanges, nearly all of them, in fact, trade on
the American Stock Exchange at present. They quote throughout the day, enabling
traders to take advantage of intraday price moves.
If you’re new to exchange-traded funds,
be sure to visit TradingMarkets’ Knowledge Center,
dedicated to explaining the basics of trading and active investing in ETFs and
mutual funds. Just click on the Funds tab
near the top of this page, then click on the Knowledge
Center tab.Â
You also will find lessons on trading
exchange-traded funds in the Stocks Education area of TradingMarkets.com. In
particular, check out my three-part series on trading ETFs, starting with
Average Crossovers. I also recommend newcomers read my tutorial,
HOLDRs: Unique Opportunity And Risk.
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