High Probability ETF Trading: 7 ETFs You Need to Know for Thursday: SPY, EWZ, IWM, EWQ, XHB, ITB, GLD

ETF markets continue to drift deeper into overbought territory, with commodity-related funds like the ^XLB^ among the most overbought exchange-traded funds in our database.

Asian country funds are among the most overbought country funds. The ^EWJ^ has closed higher for four out of the past five trading days, while the ^EWM^ is up for five sessions in a row and exceptionally overbought.

Here are 7 ETFs You Need to Know for Thursday.

The ^SPY^ has closed in overbought territory above the 200-day moving average for nine consecutive trading days heading into Thursday’s trading. Very overbought, the SPY has closed in oversold territory only once in December.

Two days after pulling back into oversold territory above the 200-day moving average, the ^EWZ^ on Wednesday rallied by more than 2% to close above its 5-day moving average.

EWZ chart

Wednesday’s rally puts the EWZ back in overbought territory.

Sideways trading in the ^IWM^ has helped relieve overbought conditions in the exchange-traded fund, which is now in neutral territory above the 200-day moving average.

European exchange-traded funds such as the ^EWQ^ continue to follow-through to the upside after pulling back at the beginning of the week.

Trading just outside of oversold territory above the 200-day moving average is the ^XHB^ (below).

 XHB chart

XHB has closed lower for three out of the past four trading days heading into Thursday.

Also trading near oversold levels above the 200-day is the ^ITB^.

ITB chart

ITB has been trading above its 200-day moving average since late in the first half of December.

Up for a third day in a row and increasingly overbought above the 200-day moving average going into trading on Thursday is the ^GLD^.

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