Best And Worst ETFs Of The Week Amid Energy Deflation

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The stock market hit a speed bump this week as plunging crude oil prices continued to pressure the energy sector. The benchmark Energy Select Sector SPDR XLE fell to its lowest levels of 2014 on Friday and is now down more than 16 percent this year.

This deflation in energy stocks finally made a dent in the broad market as well, with the SPDR S&P 500 ETF SPY dropping more than 2 percent this week. The recent volatility now puts in question the prospect of a Santa Claus rally to close out the year on a positive note.

The following ETFs represent a sample of the best- and worst-performing funds over the last five trading sessions.

Related Link: Will The Grinch Steal THe Santa Claus Rally In 2014?

BEST: Volatility Indexes

Any hiccup in the equity markets seems to make investors immediately run for cover these days, and volatility indexes are the beneficiaries of this fear. The iPath S&P 500 VIX Short-Term Futures ETN VXX tracks near-month volatility futures contracts and gained more than 25 percent this week.

The CBOE VIX Index that VXX follows is a measure of expected volatility based on equity options activity. This well-known fear gauge spiked rapidly during the October selloff in stocks and is once again moving sharply higher.

Traders should be mindful that these VIX indexes can be highly temperamental and subject to quick reversals in fast-moving markets.

WORST: Greek Stocks

The Greek bailout appears in jeopardy as political wrangling and fears over defaulting on debt left the Global X FTSE Greece 20 ETF GREK down more than 20 percent this week. This country-specific ETF has over $100 million in assets committed to 20 of the largest securities on the Athens Stock Exchange.

GREK fell to its lowest levels of 2014 and is now down more than 38 percent this year, rivaling Russia for one of the worst global returns of any stock market. This country will be under the microscope for quite some time as political elections play out and economic reforms still remain in question.

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Posted In: Long IdeasSector ETFsBroad U.S. Equity ETFsShort IdeasSpecialty ETFsEmerging Market ETFsTop StoriesTrading IdeasETFs
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