Amid the market turmoil, are there indicators to watch that will signal a market, and exchange traded fund (ETF) recovery, or turning point?
Roger Nusbaum for The Street says that we can expect certain types of market behaviors that indicate a possible recovery. Certain sub-sectors of the market will start to outperform, but some people may not believe the performance is sustainable.
Agriculture stocks are noticeable right now, and compared to the S&P 500, which has dropped 19.8% over three months, Market Vectors Agribusiness (MOO) is up 2.2%. Long-term global demographic trends make MOO a candidate to be one of the leader groups out of this bear market, regardless of whether that is starting now, according to Nusbaum.
As emerging markets continue to develop and refine their diets, so will the quality of life of their populations. Sustaining protein and growing crops in land that has not been farmed may be the next trend on the horizon.
Before jumping into any investment or ETF, be sure to watch the trend lines. Make sure that the stocks are above their 200 day-moving-average before you do anything.
- PowerShares DB Agriculture (DBA): down 11.3% year-to-date; down 0.9% for one week
- Market Vectors Agribusiness (MOO): down 1.8% year-to-date; up 4.3% for one week
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.