ETF Watchlist for May 11, 2016

SPDR Energy (XLE)
FirstTrust ISE Revere Natural Gas (FCG)
Global X Copper Miners (COPX)
Market Vectors Coal (KOL)
Market Vectors Steel (SLX)

Industrial commodities are in a corrective phase. Prices for China’s iron ore, steel and coal are tumbling following speculation crackdowns. China’s production has also increased over the past few months in response to rising prices, yet demand has not increased. SLX’s run appears to be over and a pullback to $24 seems likely.

iShares US Medical Devices (IHI)
iShares US Health Providers (IHF)
iShares Nasdaq Biotechnology (IBB)
SPDR Pharmaceuticals (XPH)

Medical devices continue to lead the healthcare sector, while pharma lagged over the past week. Strong earnings and takeovers have fueled the latest bout of outperformance. Biotechnology recovered from some earnings misses and bounced higher.

SPDR S&P 500 (SPY)
iShares Russell 2000 (IWM)
S&P Midcap 400 (MDY)
PowerShares QQQ (QQQ)
SPDR S&P Dividend (SDY)

Technology had pulled the Nasdaq lower in recent weeks, but the rally has moved the Nasdaq ahead of the other major indexes. Microsoft (MSFT) rallied during the week, but the more important moves were in Facebook (FB) and Amazon (AMZN), which both set new highs.

WisdomTree Bloomberg USD Bullish (USDU)
CurrencyShares Euro Trust (FXE)
CurrencyShares British Pound (FXB)
CurrencyShares Canadian Dollar (FXC)
CurrencyShares Japanese Yen (FXY)
WisdomTree Emerging Market Currency (CEW)

The Bank of Japan signaled it may take actions to devalue the yen, halting the U.S. dollar’s bearish trend. The Chinese yuan then devalued versus the dollar. The euro is bumping up against resistance at $1.14, or $112 for FXE. The euro is the largest component of the U.S. Dollar Index at 57.6 percent of assets, and 32 percent of USDU.

SPDR Utilities (XLU)
SPDR Pharmaceuticals (XPH)
SPDR Materials (XLB)
SPDR Consumer Staples (XLP)
SPDR Consumer Discretionary (XLY)
SPDR Healthcare (XLV)
SPDR Technology (XLK)
SPDR Financials (XLF)
SPDR Retail (XRT)

Technology has been the leading sector over the past week. Dividend paying consumer staples have also outperformed, while utilities saw losses.

Consumer discretionary shares were down on Wednesday following an earnings miss at Disney (DIS). Theme park attendance and newly released movies have exceeded expectations, but cable television divisions, including ESPN, continue to struggle under increasing pressure from streaming competitors.

Macy’s (M) beat estimates by more than 10 percent, but weak guidance disappointed shareholders. JCPenney (JCP), Kohl’s (KSS) and Nordstrom’s (JWN) will report later this week. KSS and M are at 52-week lows and JWN could soon follow. Consumers are spending at a healthy pace; brick-and-mortar retail slumps simply reflect changing shopping patterns. Online retailers such as Amazon, are setting new 52-week highs as they capture more consumer activity.

iShares iBoxx High Yield Corporate Bond (HYG)
iShares iBoxx Investment Grade Corporate Bond (LQD)

HYG traded sideways with oil prices over the past week. LQD found a new 52-week high, powered by falling interest rates.

First Trust Dow Jones Internet (FDN)

The Internet sector continues to rally and a 2 percent gain will lift FDN to a new 2016 high. Amazon and Facebook are pulling FDN higher. Improved performance from Alphabet (GOOG), (CRM) and Paypal (PYPL) will be needed to challenge the 52-week high set last year.

Guggenheim Solar (TAN)
First Trust Global Wind (FAN)

Alternative energy fund performance has diverged this year. Wind power has followed coal and oil higher, but solar has moved sideways, hurt by overcapacity and bankruptcies. To be truly competitive, solar needs oil to rise above $80 per barrel.

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