The big news in the world of momentum stocks and exchange traded funds is the ongoing retrenchment in the biotechnology sub-sector.
On Monday, the iShares Nasdaq Biotechnology ETF (NasdaqGM: IBB), the largest biotech ETF, is off 2.8% on volume that is already nearly triple the daily average, bring its five-day loss to 7.1%. The SPDR S&P Biotech ETF (NYSEArca: XBI), an equal weight ETF with ample small-cap exposure, is off 4.4% on volume that is close to twice the daily average, enough to bring that ETF’s five-day drop to 7.3%.
Conversely, the oft-overlooked ProShares UltraShort NASDAQ Biotechnology (NasdaqGM: BIS), the double-leveraged inverse answer to IBB, is higher by 6.5% and should easily see turnover that exceeds 10 time the daily average. [Inverse Biotech ETF Suddenly Popular]
Biotech ETFs are not the only momentum funds that have suddenly fallen out of favor with Mr. Market. Take the Global X Social Media Index ETF (NasdaqGM: SOCL) as an example. Down 3.4%, SOCL is now lower by 6.1% over the past week. Assuming Monday’s 3%-ish loss holds, SOCL will be saddled with a one-month loss of 10%.
In a sign of just how bad things are for SOCL Monday, the best performer among the ETF’s top-10 holdings is Google (NasdaqGS: GOOG), which is lower by nearly 3%. Volume in SOCL is already 50% above the daily average. [Tough Day for Social Media ETF]
Predictably, weakness in social media stocks is permeating the broader Internet complex as the First Trust Dow Jones Internet Index Fund (NYSEArca: FDN) is lower by 3.2% on volume that is approaching two and a half times the daily average. The PowerShares NASDAQ Internet Portfolio (NasdaqGM: PNQI) is down 3.6%. Both ETF’s are being hampered by, among other negative catalysts, a 9% plunge in shares of Netflix (NasdaqGS: NFLX). The best performer among FDN’s top-10 holdings Monday is Juniper Networks (NasdaqGS: JNPR), which is down 1.2%. [The Rising ETF Presence of Netflix]
The situation with the Guggenheim Solar ETF (NYSEArca: TAN), last year’s best non-leveraged ETF and again among the top five in 2014, is particularly vexing. Over the past five sessions, TAN is down 6.5% while its second-largest holding, First Solar (NasdaqGS: FSLR), is up almost 28% over the same time. First Solar is the best performer among TAN’s top-10 holdings today that are U.S.-listed with a loss of 1.7%. [Solar ETF Looks to Build on Gains]
Guggenheim Solar ETF
ETF Trends editorial team contributed to this post.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.