Market Overview

ETFs Scarier Than Halloween (VXX, GLDX, SCIF, JO)

On the eve of the scariest holiday of the year investors have not had much fear in regards to their portfolios in 2013.

As a matter of fact, the S&P 500 has not been in negative territory at any point during the year. The same cannot be said for all the ETFs that trade in the U.S.

There are more scary charts out there than most would imagine with the S&P 500 up over 20 percent this year. However, as good as things have been for the overall stock market, there are certain sectors that have struggled mightily in 2013.

iPath S&P 500 VIX Short-Term Futures ETN (NYSE: VXX)

The CBOE Volatility Index (VIX) tends to move higher in value when fear is high among investors and the stock market is falling. Unfortunately for holder of VXX, this year has been the exact opposite, little fear and stocks hitting all-time highs.

Therefore VXX has one of the scariest charts on Wall Street. The ETN has fallen by 59 percent in 2013 and is trading near an all-time low. The VIX has not lost that much value, but because VXX tracks futures contracts and must continuing roll over into the next month it has a compounding affect on the negative return.

Global X Gold Explorers ETF (NYSE: GLDX)

There are several ETFs that invest in gold and silver stocks and the reason GLDX made the list is because it was the worst of the group so far this year. A 52 percent drop for a non-leveraged ETF is a scary thought and for the investors that continue to give up on the sector it is reality. The monstrous loss is after a rally of 20 percent in the last two weeks.

From the look of the chart, it appears it may be time for investors to cut their losses with the precious metal miners and look for opportunities elsewhere.

Market Vectors India Small-Cap Index ETF (NYSE: SCIF)

The small-cap stocks in the U.S. are hitting new highs and outperforming this year while halfway around the globe their peers in India are struggling. The ETF has fallen by 38 percent in 2013 and is down 70 percent in the last three years. As bad as the last few years have been the last two months have started to helped the ETF rally to the best level since July.

This may be the bottom that investors have been looking for the last few years or it could simply be some lipstick on a pig this Halloween season.

 iPath Dow Jones-UBS Coffee ETN (NYSE: JO)

The line at the local Starbucks (NASDAQ: SBUX) may appear scary in the morning, but probably not as bad as the chart on JO. The ETN that tracks the futures price of coffee has lost one-third of its value in 2013 and is trading at an all-time low. Since April 2011 the ETF is down 73 percent and there does not appear to be a bottom in sight.

The main culprit has been good rains in Brazil the last couple of years that has led to better than expected harvests. While this may be good for companies like SBUX, it has been ugly for investors in JO.

Of the four ETFs listed above it would be aggressive to buy today in hopes by next Halloween the charts would not look as scary. The only option that has a glimmer of hope is SCIF based on the current rally from the bottom. However proceed with caution as danger may lie ahead.

Posted-In: HalloweenSector ETFs Specialty ETFs Emerging Market ETFs ETFs Best of Benzinga

 

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