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Apple, Techs Weigh On Stocks; Bitcoin Jumps; Time To Buy Gold?

Key U.S. stock indexes were lower in the stock market today amid heightened North Korea tensions and as Apple (AAPL) and other techs fell under pressure.

X PowerShares QQQ Trust (QQQ) sank 1.2%, SPDR S&P 500 (SPY) fell 0.3% and SPDR Dow Jones Industrial Average (DIA) gave up 0.3%. Emerging markets fell further: iShares MSCI Emerging Markets (EEM) lost nearly 2%.

Among sector plays, retail, biotech and real estate funds gained. Gold also rallied in a flight to safety. Gold futures rose more than 1% to $1,312.50 an ounce. SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) were up 0.9% each. Both ETFs bounced off their 50-day moving average lines and are back in a buy range from their respective flat-base entries at 123.41 and 12.57.

Other currency plays also advanced. PowerShares DB US Dollar Bullish (UUP) gained 0.6% as it tries to move off a recent bottom. Bitcoin Investment Trust (GBTC) gapped up and leapt 5% after bouncing off support at its 50-day line on Friday. It's still 34% off its high after a volatile three weeks.

Oil ETFs also advanced as West Texas intermediate crude prices soared more than 2% to $51.79 a barrel. VanEck Vectors Oil Services (OIH) and SPDR S&P Oil & Gas Exploration & Production (XOP) rallied 2.4% apiece. United States Oil (USO) surged 2.3% and PowerShares DB Oil (DBO) advanced 2.1%.

Semiconductor, technology and financials were lower. VanEck Vectors Semiconductor (SMH) and iShares PHLX Semiconductor (SOXX) each fell more than 1%. Technology Select Sector SPDR (XLK) slid 1.3%, slicing its 50-day line for the first time since early July.

Apple gave up 1%, on track for a fourth straight decline that started with a breach of support at its 50-day line.

2 Equity Plays Near Buy Point

A recent small-cap stock rally lifted iShares Russell 2000 Growth (IWO) past a buy point, though it pulled back below the entry Monday.

After flirting with a 174.04 flat-base buy point early in the week, shares closed above the entry on Friday. IWO advanced 6% from a prior breakout to the high that marks the start of the just-cleared pattern.

The 17-year-old fund, which tracks the index bearing the same name, has attracted $8.3 billion in assets. It provides exposure to domestic small-cap companies with expected above-average earnings growth rates. The expense ratio is 0.24%.

Technology accounted for a quarter of the market-cap-weighted portfolio as of Sept. 20, followed by 23% in health care, 16% in industrials and 13% in consumer cyclical stocks. Top holdings included biotech Kite Pharma, which is being acquired by Gilead Sciences (GILD). Kite shares gapped up and soared 28% on Aug. 28 on the news.

Among other top names, according to Morningstar Direct: trucker Knight-Swift Transportation (KNX), biotech Exact Sciences (EXAS) and Catalent (CTLT), a provider of drug-delivery solutions and other clinical services.


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IWO's 13.8% year-to-date gain through Sept. 21 is roughly in line with the S&P 500, which has generated a 13.4% return. Its five-year average annual return is also close to the benchmark index, but it's outperformed the S&P 500 over the past 10 and 15 years.

First Trust Dorsey Wright (FV) cleared a 25.82 flat-base entry Sept. 18 and is just shy of buy range. The $2.4 billion fund was featured in this July 20 ETF column, just after a breakout from a previous flat base. It made a fractional move higher before consolidating.

FV selects five ETFs from a universe of First Trust sector and industry ETFs based on relative price momentum and equally weights the components. The relative strength analysis is conducted two times a month. The five ETFs as of Sept. 21 included First Trust Dow Jones Internet (FDN), First Trust Nasdaq 100 Tech Sector (QTEC) and First Trust Utilities AlphaDEX (FXU).

The fund has returned 12.2% YTD. Its three-year average annual return is also slightly behind that of the S&P 500. FV, which Morningstar Direct classifies as midcap growth, bears an 0.89% expense ratio.

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