Gold Up, Miners Down as Traders Await QE2 News from the Fed: 7 ETFs You Need to Know for Tuesday
Traders will find a market that is only moderately overbought on the second trading day of the week. Buyers remain active in technology, while sellers have begun to take profits in the energy sector. Financials remain a relatively listless trade.
Especially interesting is the divergence between bullion-related precious metals ETFs and precious metals mining ETFs. Bullion funds like the IAU from yesterday’s 7 ETFs You Need to Know and GLD have continued to move higher while mining stocks and funds have experienced significant selling of late.
Here are 7 ETFs You Need to Know for Tuesday.
Shares of the Market Vectors Gold Miners ETF ^GDX^ (below) reversed sharply on Monday.
GDX closed lower by more than 2% heading into trading on Tuesday. The pullback erased two and a half days worth of gains.
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And as I noted yesterday in 7 ETFs You Need to Know, bullion-related exchange-traded funds have continued higher despite weakness among the miners. Closing higher for eight days in a row is the SPDR Gold Trust ETF ^GLD^.
After a three-day rally took the ProShares Ultra Oil & Gas ETF ^DIG^ up into overbought territory, traders began taking profits on Monday, causing DIG to pullback by 1%.
Down for three of the past four trading days, the iShares MSCI Hong Kong Index Fund ETF ^EWH^ (below).
EWH is the most oversold country fund in our database heading into Tuesday’s session. The next most oversold country fund is the iShares FTSE/Xinhua China 25 ETF ^FXI^, which is trading in neutral territory.
Among the exchange-traded funds trading just outside of oversold territory above the 200-day moving average is the Consumer Select Sector SPDRS ETF ^XLP^. Shares of the fund pulled back on Monday after a three-day rally.
Strength in the Nasdaq 100 has resulted in an exceptionally oversold market for the ProShares UltraShort QQQ ETF ^QID^ (below).
QID has closed lower for four days in a row and has had a 2-period RSI in the single digits for the past three consecutive sessions.
David Penn is Editor in Chief of TradingMarkets.com