High Probability ETF Trading: 7 ETFs You Need to Know for Monday (EWT, EWY, GDX, GLD, SLV, XLY, QQQQ)

Growing oversold conditions in Asian ETF markets and increasing selling in gold may be helping drive buyers into ETF markets in the United States. Overbought conditions in technology and finance continue to keep U.S. ETFs aloft, with the ^QLD^ and the ^XLF^ both gaining more than 1% on Friday.

Here are 7 ETFs You Need to Know for Monday.

Asian country funds continue to be among the most oversold exchange-traded funds in our database. Down more than 2% on Friday alone and closing lower for a fourth day in a row was the ^EWT^ (below).

EWT chart

Shares of EWT are at their most oversold since rallying above their 200-day moving average in September of 2010. Also at major oversold extremes is the ^EWY^.

In addition to ETF markets linked to Asia, gold-related ETFs are also a significant source of weakness heading into Monday’s trading. In oversold territory above the 200-day are both gold mining related fund as the ^GDX^, as well as gold bullion-based ETFs like the ^GLD^.

Both GDX and GLD have closed lower for three days in a row heading into trading on Monday.

The ^SLV^ (below) has closed lower for three days in a row, bu is not yet in oversold territory.

SLV chart

Traders watching SLV should be alert to any significant selling in the exchange-traded fund which could put the ETF in oversold territory as early as Monday’s close.

Overbought conditions in retail and other consumer cyclical stocks has helped the ^XLY^ close higher for seven straight trading days – all in overbought territory above the 200-day.

The ^QQQQ^ (below) is the most overbought of the major U.S. market index ETFs.

QQQQ chart

The QQQQ has closed higher for six out of the past trading days. The ETF has not closed below its 5-day moving average since the last day of January.

With 7 professional, quantified trading strategies for trading both bull and bear markets, High Probability ETF Trading by Larry Connors and Cesar Alvarez was voted one of the top 10 trading books of 2009 by SFO Magazine. Click here to find out why.

David Penn is Editor in Chief of TradingMarkets.com