Going into trading on Thursday, the markets appear to be in relatively neutral territory. The number of exchange-traded funds (ETFs) earning top PowerRatings of 9 or 10 remains low – one
indication of the non-extreme nature (neither dramatically overbought nor exceptionally oversold) of the current market.
One area where there are a few exchange-traded funds that have earned significant PowerRatings upgrades is in the commodity and energy space, where a number of inverse leveraged ETFs related to
oil, gold and silver have begun to pull back toward levels from which they have historically reversed and begun to move higher. In today’s report, we’ll take a look at these inverse leveraged,
commodity-based exchange-traded funds that have earned our highest PowerRatings.
To learn more about PowerRatings – especially how to use PowerRatings to trade leveraged and inverse leveraged ETFs – click here to read: “What Are PowerRatings?”.
Here are 5 ETFs for the Next 5 Days
Earning a top PowerRating of 10 for the past two days are shares of the ^SCO^ (below).
SCO has been a top rated ETF for the past several days, earning an upgrade to 9 at the end of September and maintaining that high rating until this week, when the fund earned its current top mark.
Note that the last time SCO earned PowerRatings of 10 was back in early August. Five days later, SCO closed higher by more than 12%.
Also earning top PowerRatings among leveraged ETFs going into trading on Thursday were shares of the ^ERY^. while the SCO tracks actual prices of crude oil, the Direxion Energy Bear 3x Shares tracks the share prices of the companies of the Russell 1000 Index Energy index.
ERY earned PowerRatings of 10 earlier in the month, but have since been downgraded one point to 9.
Earning a one-point upgrade from 8 to 9 as of Wednesday’s close was the ^ZSL^ (below).
Relative to some of the other ETFs in today’s report, ZSL is not quite as liquid and traders should be cautious of the potential for sudden price moves. The fund has been trading lower since late August, contributing to the ETF’s continued top ratings over the past several days. ZSL has PowerRatings of 9.
In addition to the top ratings in leveraged silver, the ^GLL^ has also earned significant PowerRatings upgrades going into Thursday’s trading.
GLL actually earned PowerRatings of 10 in late September, though those PowerRatings have moderated in the days since. Wednesday’s trading – more selling for GLL – helped bring the PowerRatings in GLL back toward top levels.
Currencies are not always thought of as commodities. But their behavior in the markets, their tendency to trend, for example, means that currencies – and for our purposes, currency ETFs – often
behave more like commodity ETFs than equity ETFs.
As such, the ^YCS^ (below) should be considered among those commodity funds that have earned top PowerRatings late in the trading week.
Tracking the exchange rate between the Japanese yen and the U.S. Dollar, YCS earned top PowerRatings of 10 at the end of September and have maintained that top rating through the close on
Wednesday. Arguably, there may be no more oversold ETF in our database than YCS, as reflecting in the fund’s persistently high rating over the past several days.
Find out more about what Leveraged ETF PowerRatings can do for you and your trading. Click here to launch your free, 7-day trial to our Leveraged ETF PowerRatings today.
David Penn is Editor in Chief at TradingMarkets.com.