The bear is storming through technology exchange traded funds (ETFs), a result of spillover from the subprime, financial and real estate crises.

It’s not as ugly as the 2000-20002 meltdown, says Gary Gordon for ETF Expert, but it isn’t pretty, either. Technology has dropped 20% from top to bottom.

The result of ugliness in technology is that last year’s worst performers are now some of this year’s better ones: SPDR Consumer Discretionary (XLY), SPDR Financials (XLF) and Homebuilders (XHB). These are the same areas that had been down more than 30% off their
highs. However, XLY and XLF are both down a bit year-to-date, while XHB is up 6.4%.

The performance numbers don’t mean banks are in great shape, either – far from it. And it doesn’t mean retailers will begin posting record profits and that homebuilders are going to be back on the upswing. It just means that the markets believe that those hobbled sectors will once again walk.

While the signs may not necessarily point to a shorter recession, there is anticipation that the Federal Reserve’s rate cut and the economic stimulus package will increase consumer spending and in turn, effect a real estate turnaround.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. 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.