High Probability ETF Trading: 7 ETFs You Need to Know for Thursday (EPI, FXI, GLD, ICF, EPP, XLE, EWA)

Heading into trading on Thursday, many of the major u.S. equity index ETFs are significantly overbought. This includes ETFs like the ^IWM^ as well as the ^SPY^.

Around the world, a number of ETFs are pulling back, especially those in India and China. Another source of significant pullbacks are the energy and gold markets, with ETFs representing both markets moving closer to oversold territory above the 200-day moving average.

Here are 7 ETFs You Need to Know for Thursday.

Shares of the ^EPI^ closed lower for a fourth day in a row ahead of Thursday’s open. While the first three days of the fund’s pullback have been relatively mild, EPI dropped by more than 1% on Wednesday.

Profit-taking in energy stocks has helped exchange-traded funds like the ^XLE^ (below) retreat toward oversold territory as of midweek.

XLE chart

Pulling back for a second day in a row, XLE is likely to return to oversold territory on any significant selling in the near term.

Have you seen The Machine? The Machine is the first financial software that lets traders and investors build quantified portfolios of backtested mean reversion and trend-following strategies. If you own an IRA or manage investments in excess of $100K, then you owe it to yourself to attend the next free, online presentation on The Machine by TradingMarkets founder and CEO, Larry Connors. To learn more and to save your spot, click here.

Also just outside of oversold territory above the 200-day moving average as of Wednesday’s close was the ^EPP^.

The ^FXI^ (below) closed lower by well over 1% on Wednesday.

FXI chart

FXI has lost ground for a third session in a row going into trading on Thursday.

Among those exchange-traded funds that have pulled back toward oversold territory above the 200-day in recent days is the ^EWA^.

With growing sellling pressure in gold, shares of the ^GLD^ (below) pulled back again on Wednesday.

GLD chart

Over the past two days, GLD has pulled back by more than 3%.

Has profit-taking arrived in real-estate ETFs? The ^ICF^ pulled back sharply on Wednesday after closing higher for five consecutive trading days.

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