5 ETFs for the Next 5 Days: Buyers Return to Retail, Gold Funds Edge Higher
Heading into midweek, some of the biggest edges in exchange-traded funds were in the consumer sector. As noted in recent columns for TradingMarkets.com (see “The Hot List: 3 Retail Stocks for Short Term Traders” and “Trading By the Numbers: Read for the Rally in Retail?), many consumer and retail-oriented stocks and ETFs have experienced significant selling, and have begun to retreat to levels from which they have historically found buyers and made short term moves higher.
As of noon on Wednesday, some of these markets have already begun to advance and are moving up from oversold territory. Included among these are ETFs representing both consumer staples – the Consumer Staples Select Sector SPDRS ETF (XLP) – and consumer discretionary – the Consumer Discretionary Select Sector SPDRS ETF (XLY) – sectors. XLP and XLY were among the few exchange-traded funds to pullback in bull market territory in recent days and have started to attract the interest of buyers once again.
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European country funds, for good reason, continue to trade in bear market territory. This means that the strength that many ETFs like the iShares MSCI France Index Fund ETF (EWQ) and the iShares MSCI Germanay Index Fund ETF (EWG) experienced on Wednesday should continue to be treated with some suspicion. Rallies in these funds in August (twice), September, and October have so far proved unsustainable and have been excellent short-selling opportunities for many traders and active investors.
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Precious metals ETFs like the iShares COMEX Gold Trust ETF ^IAU^ are also attracting buyers at midweek in the wake of Tuesday’s selling. Up less than half a percent, IAU managed to reach new short term highs on an intraday basis, but is still only just outside of technically oversold territory.
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David Penn is Editor in Chief of TradingMarkets.com