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Jan 19, 2018

S3 Analytics: S&P 500 ETF Sector Rotation Activity 12/15 – 1/18

Leading up to the kickoff of the Inside ETF’s Conference in Hollywood, Florida, January 21st – 24th, here are some trends and market perspectives occurring in the ETF space over the past month. 

There are three major ETF shorts that are used for outright market exposure and portfolio hedging – the SPDR S&P 500 ETF (SPY), the iShares Russell 2000 ETF (IWM) and the Powershares Nasdaq 100 ETF (QQQ). They have been ranked 1-2-3 in short interest balances for as long as they have been active.

Over the last two weeks of 2017, thru the beginning of 2018, there has been a significant rotation of “Sector Short-interest” in the S&P 500.  S3 Partners’ real time short interest analytics shows an increase in short exposure in the Industrial, Healthcare, Energy and Consumer Discretionary Sectors and a reduction in short exposure in Technology and Financials.    Two major catalysts of the sector rotations (specifically out of Financials), was the passage of the Tax Bill and the expectation of increased interest rates.

Want deeper insight into the above analysis? Contact:
Brett.Weiss@S3Partners.net
Director, S3 Partners

Matthew.Unterman@S3Partners.net
Director, S3 Partners
The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC ('S3 Partners') to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks and merits, as well as the legal, tax, accounting and investment consequences, of such decision.


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