The S&P 500 is up 14% so far this year, but the gains have been made on the backs of some new market leaders, as compared to 2020.

One of the biggest winners from the first two quarters of 2021 has been the energy sector, which bounced back in strong fashion as the global economy dialed-up demand to fuel the ongoing post-pandemic rebound.

Much of that momentum was due to strong surges in the prices of crude oil and natural gas futures—up 53% and 39%, respectively in H1 2021. The relative strength in energy markets shines through in the list of top-performing ETFs so far this year:

Top-Performing ETFs, H1 2021

  • Breakwave Dry Bulk Shipping ETF (BDRY) +275%
  • ProShares Ultra Bloomberg Crude Oil (UCO) +116%
  • ProShares Ultra Oil & Gas (DIG) +95%
  • First Trust Natural Gas ETF (FCG) +82%
  • Invesco S&P SmallCap Energy ETF (PSCE) +80%
  • Invesco Dynamic Energy Exploration & Production ETF (PXE) +78%
  • iPath Series B Bloomberg Tin Subindex Total Return ETN (JJT) +73%
  • Invesco DWA Energy Momentum ETF (PXI) +71%
  • iPath Series B Carbon ETN (GRN) +70%
  • VanEck Vectors Unconventional Oil & Gas ETF (FRAK) +70%
  • SPDR S&P Oil & Gas Exploration & Production ETF (XOP) +63%
  • InfraCap MLP ETF (AMZA) +61%

Amazingly, of the 12 top-performing ETFs listed above, 10 of them hail from the energy sector.

However, when one expands the list of H1 ETF winners to include leveraged and inverse ETFs, some other themes do emerge, including retail, banking, real estate and cannabis:

Top-Performing Leveraged/Inverse ETFs, H1 2021

  • Direxion Daily Retail Bull 3X Shares (RETL) +160%
  • MicroSectors U.S. Big Banks Index 3X Leveraged ETN (BNKU) +100%
  • Direxion Daily Regional Banks Bull 3X Shares (DPST) +77%
  • Direxion Daily Financial Bull 3X Shares (FAS) +77%
  • Direxion Daily Real Estate Bull 3x Shares (DRN) +74%
  • Direxion Daily Transportation Bull 3X Shares (TPOR) +60%
  • Amplify Seymour Cannabis ETF (CNBS) +44%

Looking at single stocks, the list of first-half winners gets even more diverse.

After energy (+48%), some other sector winners included: technology (+25%), financials (+23%), capital goods (+21%), consumer non-cyclical (+20%) and transportation (18%). Listed below are some of the top-performing large-cap stocks thus far in 2021:

  • Gamestop (GME) +1,100%
  • Tecnoglass (TGLS) +222%
  • Dillards (DDS) +213%
  • Veritiv (VRTV) +195%
  • Timkensteel (TMST) +190%
  • Peabody Energy (BTU) +168%
  • RR Donnelley and Sons (RRD) +152%
  • Bonanza Creek Energy (BCEI) +135%
  • Abercrombie and Fitch (ANF) +126%
  • Teradata Corp (TDC) +124%
  • Salem Media (SALM) +123%
  • Avis Budget Group (CAR) +120%
  • 22nd Century Group (XXII) +115%

Of course, it’s also helpful to highlight some first-half losers, including the large-cap underperformers listed below:

  • Sherwin Williams Company (SHW) -62%
  • Fannie Mae (FNMA) -35%
  • Pinduoduo (PDD) -31%
  • Splunk Inc (SPLK) -28%
  • Peloton Interactive (PTON) -25%
  • Clearwater Paper Corp (CLW) -24%
  • Affinion Group (AGI) -20%
  • (JD) -19%
  • Credit Suisse (CS) -19%
  • Verisk Analytics (VRSK) -17%
  • PG&E Corp (PCG) -16%
  • Cognizant Technology (CTSH) -13%
  • Baidu Inc. (BIDU) -13%

Depending on one’s outlook, strategic approach and risk profile, the above lists may provide a good foundation for brainstorming on second-half 2021 positioning.

Agricultural Commodities Boom

Outside of stocks and ETFs, agricultural commodities have also experienced a strong bull run in 2021. The major catalysts in this narrative involve the re-emergence of Chinese importers in the American market, as well as a persistent drought that has cut into 2021 harvest projections.

The price charts for soybeans and corn, as shown below, help illustrate the relative strength in the American agricultural commodities sector so far this year.

Investors and traders can access agricultural exposure through commodities futures, or through exchange-traded funds (ETFs) such as the Teucrium Corn Fund (CORN), the Teucrium Soybean Fund (SOYB) and the Teucrium Wheat Fund (WEAT).

H2 2021: Infrastructure, Cryptocurrencies and Inflation

Looking into the second half of 2021, an important theme to monitor is the infrastructure bill currently being debated in Washington D.C. The passing of that legislation—depending on the ultimate size and scope of the package—could have a significant impact on companies and commodities that are strongly levered to construction, building and materials.

Along those lines, some potential underlyings to monitor alongside infrastructure bill negotiations, include:

  • BHP Group (BHP)
  • Brookfield Infrastructure (BIPC)
  • Caterpillar (CAT)
  • Chargepoint Tech (CHPT)
  • Crown Castle International (CCI)
  • Eaton (ETN)
  • Martin Marietta Materials (MLM)
  • Oshkosh (OSK)
  • Nucor (NUE)
  • Rio Tinto (RIO)
  • United Rentals (URI)
  • Vale (VALE)
  • Vulcan Materials (VMC)

One additional ETF to watch alongside the above stocks is the Global X U.S. Infrastructure Development ETF (PAVE).

According to its investment mandate, PAVE “seeks to invest in companies that stand to benefit from a potential increase in infrastructure activity in the United States” — as well in raw materials, heavy equipment and construction.

If an infrastructure bill fails to pass through Congress, or is smaller than expected, it’s even possible that infrastructure-related stocks could experience a pullback (i.e. “sell the news”).

Another big story from the last six months of trading has been the run-up, and subsequent meltdown, in the cryptocurrency sector.

Since reaching an all-time high above $65,000/coin in April 2021, Bitcoin prices have steadily declined throughout early summer. The price now stands at about $34,000/coin, which represents a decline of over 45% from the all-time high.

Looking at trading behavior in Bitcoin over the last month or so, a significant level of resistance appears to have materialized at $40,000/coin, as the world’s best-known cryptocurrency has continuously struggled to trade above that level.

Dogecoin, which caught fire earlier in 2021, has experienced a similar reversal. After briefly climbing above $0.70/coin in early May, Dogecoin has plummeted all the way back down to $0.25/coin—a decline of nearly 70% in roughly seven weeks.

As a whole, the combined market capitalization of the entire cryptocurrency sector lost more than a trillion dollars in value during the May correction. And bitcoin’s market cap, which on its own stood above $1.2 trillion in spring, has now fallen to around $650 billion.

Naturally, the big question now is when, or if, the tide of negative sentiment will shift in the other direction. And there’s no doubt that a slew of market participants will be playing both sides of the cryptocurrency sector until that paradigm shift materializes.

Lastly, one of the other big stories in 2021 has centered on inflation. However, considering that U.S. Treasury yields have pulled back sharply from 52-week highs, there appears to be some debate over just how, or if, the inflation story will affect the markets this year—as covered recently by Luckbox.

For daily updates on everything moving the markets in H2 2021, readers can tune into TASTYTRADE LIVE—weekdays from 7 a.m. to 4 p.m. CST—at their convenience.

Sage Anderson is a pseudonym. He’s an experienced trader of equity derivatives and has managed volatility-based portfolios as a former prop trading firm employee. He’s not an employee of Luckbox, tastytrade or any affiliated companies. Readers can direct questions about this blog or other trading-related subjects, to