Energy’s The Lone Ranger
How do you explain
a market that pressures both growth and defensive sectors?
Uncertainty.
Signs of a slowing
economy, without clear signs of the Federal Reserve’s next
move, weighed Monday on the tech, cyclical, and defensive
funds. The Energy Spider made the day’s largest gains among
the U.S.-focused funds but produced no breakout.
The Biotech HOLDR
(
BBH |
Quote |
Chart |
News |
PowerRating) forfeited 4.8%, the session’s biggest loss among
the exchange-traded funds. The Internet HOLDR
(
HHH |
Quote |
Chart |
News |
PowerRating) sank
4.0%, undercutting a six-session trading range. The Nasdaq
100 Tracking Stock
(
QQQ |
Quote |
Chart |
News |
PowerRating) slid 3.2%.
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The
Cyclicals/Transportation SPDR
(
XLY |
Quote |
Chart |
News |
PowerRating) gapped lower,
falling 2.6% to its lowest close since March 14. As of March
31, the tradable fund held 70 stocks whose weight
represented about 7.5% of the S&P 500 Index. Some of the
fund’s biggest holdings have lost steam amid signs that the
Federal Reserve’s tightening campaign is slowing the housing
market and consumer spending.
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The fund’s two
largest holdings, as of March 31, were Home Deport
(
HD |
Quote |
Chart |
News |
PowerRating),
which Monday shed 2 3/16 to 46 on twice its usual trade, and
Wal-Mart
(
WMT |
Quote |
Chart |
News |
PowerRating), which lost 1 1/4 to 52 3/4 on
above-average volume.
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The MidCap SPDR
(
MDY |
Quote |
Chart |
News |
PowerRating)
dropped 1.5%. The fund formed a bearish engulfing pattern,
meaning the day’s price range exceeded that of the prior
session and the day’s close was below the prior session’s
intraday low.
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The defensive
Pharmaceutical HOLDR
(
PPH |
Quote |
Chart |
News |
PowerRating) opened above its 50-day
moving average but again closed below the line, giving up
0.7%.
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The Energy SPDR
(
XLE |
Quote |
Chart |
News |
PowerRating)
came alive as crude oil prices snapped back toward some of
the highest levels in a decade. The Energy Spider rose 2.3%.
A good way to
check the health of a sector is by digging into the behavior
of individual stocks. TradingMarkets makes its easy for
subscribers to spot industries with lots of stocks in
constructive price patterns. Check out TradingMarkets’
Building A Base screen.
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Mutual
Funds
The strength in
energy showed up as well in the mutual funds. Fidelity
Select Energy Service
(
FSESX |
Quote |
Chart |
News |
PowerRating) rose 4.9% in Net Asset
Value, Rydex Energy Services Inv
(
RYVIX |
Quote |
Chart |
News |
PowerRating) 4.7%, Invesco
Energy
(
FSTEX |
Quote |
Chart |
News |
PowerRating) 3.3%, Icon Energy
(
ICENX |
Quote |
Chart |
News |
PowerRating) 3.0%,
Fidelity Select Energy
(
FSENX |
Quote |
Chart |
News |
PowerRating) 2.8%, and Vanguard
Energy
(
VGENX |
Quote |
Chart |
News |
PowerRating) 2.8%.