Sector ETFs

M

Matix04

Hey guys,

With the comparison of the VIX and INDU (which I understand has been covered), we can see there is a good indication that this is a short term bottom. If this is also your viewpoint, which sector-based ETFs do you think will perform the best in the next few days and why? Currently I'm leaning towards the XLF, but I'd like to hear what you guys have to say.
 
Quote from Matix04:

Hey guys,

With the comparison of the VIX and INDU (which I understand has been covered), we can see there is a good indication that this is a short term bottom. If this is also your viewpoint, which sector-based ETFs do you think will perform the best in the next few days and why? Currently I'm leaning towards the XLF, but I'd like to hear what you guys have to say.
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It's interesting that you hear a lot about stock picking, yet little about sector picking. A sector is as important as the actual stock.

I trade only indexes, so I'm not really into sector/stock picking, but you can check out:
http://www.briefing.com/Investor/Public/OurView/SectorView.htm

Practically all sectors are dependent on indexes direction, and right now, nothing is written in stone; it remains to be seen if this is really a bottom.

As a market neutral strategy (recommended now) you can do a nice pair trading going long on a energy or industrials ETF and shorting a financials ETF.
 
Thanks for the info and the link. I found another site which has Sector ETF performance listed, located here: http://www.stockselector.com/

I find that the Sector ETFs mostly track indexes, such as the DIA. For example, the XLF showed strength when the DIA went to test lows, yet rose higher when the DIA went higher. Others though, like the QQQQ today, followed the DIA in a sense, but showed more weakness when the DIA was falling. So in the end, what I'm looking for is the sector that is most likely to show strength on a possible recovery day like tomorrow.
 
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