As we move into second quarter, leading ETFs and position changes among leading sectors continue to indicate a change in trend for global financial markets.
Hot ETFs: 5 days
iPath S&P 500 VIX Short Term Futures TM ETN: (NYSEARCA:VXX) +8.0%
Vanguard Extended Duration Treasury ETF (NYSEARCA:EDV) +5.1%
Market Vectors Viet Nam ETF (NYSEARCA:VNM) +3.6%
Hot ETFs: 30 days
Vanguard Extended Duration Treasury ETF (NYSEARCA:EDV) +7.3%
VelocityShares Daily Inverse VIX Short Term ETN (NYSEARCA:XIV) +5.9%
iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSEARCA:TLT) +5.5%
A glance at the leaders shows us that over the last five days, Treasuries and long VIX have been leaders, indicating fear in the market place as volatility spiked while money flowed to the perceived safety of US Treasuries. However, while this was going on, emerging market Viet Nam, typically considered a risk asset, also continued its rise.
On a longer 30 day time frame, we see Treasuries again in a leading position, but this time along with short VIX ETFs which gained in value as the market rallied over the last thirty days, just ending in the last two weeks.
So here we have an odd juxtaposition of readings with flight to safety ETFs sharing leadership spots with ETFs that correlate to bull market conditions.
Bottom line: Conflicting leadership in sectors and opposing ETFs oftentimes indicates a trend change is in progress as the slower moving 30 day leaders gradually give way to the faster moving 5 day up and comers. We are seeing that situation develop here and the fact that we have US Treasuries on both the 5 day and 30 day leader board indicates a rising groundswell towards the safety of US bonds which oftentimes means lower stock prices ahead.