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.