Some may believe that the equity markets were firing on all cylinders until Dubai World's debt struggles became headline fodder over T-Giving. Others have suggested that investors began ratcheting back risk a week earlier (circa 11/18); that's when a surprise drop in new home construction and unforeseen strength in the U.S. dollar rattled stock prices for 3 consecutive days. Still others point to the fact that the S&P 500 is in the same place that it was in mid-October.

Granted, the S&P 500 wasn't able to hold its intra-day peak of 1120, let alone the psychological 1100 level. In fact, it is trading around 1093 as I type. This is the exact price on the S&P 500 from November 9, 2009... 1 month ago.

I thought it might be intriguing to look at the ETFs that have made noteworthy progress over that period - a time frame where the broader U.S. markets went nowhere. Could those ETFs be telling us something about the state of the cyclical bull rally?

5 ETFs That Have Bucked The 1-Month Blues 
     Approx % Gain 11/9-12/8
Claymore Arca Airline (FAA)  14.2%
SPDR Semiconductors (XSD)  10.8%
iShares Telecom (IYZ)  8.2%
Market Vectors Agribusiness (MOO) 7.6%
SPDR Select Utilities (XLU)  5.0%

Strangely, one might not find a more eclectic match in a month-over-month assessment. The surge in the Claymore ARCA Airline Fund (FAA) is primarily attributable to lower fuel costs and recent industry-wide upgrades by Morgan Stanley analysts.


A more compelling story, however, is the recent interest in defensive stock assets with significant yield. All year long, investors have shunned utilities and passed on telecom... until now.

In my estimation, there's clear enough evidence that a partial shift of assets are moving towards defensive equity positions. Yet by the same token, it may have just as much to do with a pursuit of yield/dividend capture strategies that often occur in December.


Of course, if the risk trade is coming to a close... if the strengthening of the U.S. dollar is causing folks to unwind their riskier growth stock holdings... how does one explain interest in SPDR Semiconductors (XSD) and Market Vectors Agribusiness (MOO)? Semis are widely tracked as a reliable precursor for economic recovery while agricultural-related companies are at the core of the global growth/worldwide demand story.

It seems to me, the investment community may be split. Or, perhaps, the global growth story is intact, yet the headwinds of a strengthening U.S. currency is causing some rotation into defensive dividend-producers.