The S&P 500 lost 1.2% on Tuesday as the U.S. government shutdown lingered on, but the signals from some previously beloved ETFs might be telling investors a near-term pullback is in the offing.
Of the 15 worst non-leveraged ETFs in terms of Tuesday performances, almost all have spent considerable time soaring this year. In fact, three of those ETFs, or 20% of the “Dirty 15,” can be found among the 10 best non-leveraged sector funds this. [10 ETFs Providing Bang for the Buck]
The chart below, courtesy of the ETF execution team at WallachBeth Captial, shows some concerning themes. First, biotech ETFs, previously shelter from the storm plays in the face of various macro headwinds, were anything but on Tuesday. Second, investors may be starting to believe Internet and social media stocks are too expensive. [Social Media ETF Party Could be Over]
Finally, volume was above average, in all of the ETFs in the chart. In some cases, well above average and that may not be a good sign.
Chart courtesy WallachBeth Capital
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.