High Probability ETF Trading: 7 ETFs You Need to Know for Tuesday (IJS, VB, UWM, HYG, JNK, EWQ, EWP)

The major equity index ETFs began showing some significant independence on Monday. The ^SPY^ continued to trade in overbought territory above the 200-day, while the ^QQQQ^ pulled back to more neutral levels. Closing in oversold territory ahead of Tuesday’s trading was the ^IWM^.

Some of the Asian country funds that had pulled back into oversold territory bounded higher on Monday. This includes ETFs like the ^FXI^ and the ^EWH^ both up more than 1%.

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Here are 7 ETFs You Need to Know for Tuesday.

Traders looking for edges in exchange-traded funds may want to spend some time looking at those funds representing small cap stocks. Closing in oversold territory above the 200-day moving average ahead of trading on Tuesday were the ^IJS^, the ^VB^, and the ^UWM^ (below).

UWM Chart

Shares of all three ETFs have closed in oversold territory above the 200-day moving average for two out of the past three days. UWM in specific has closed lower above the 200-day for four out of the past five trading days.

Also closing in oversold territory on Monday were junk or high yield bond ETFs: the ^HYG^, which closed at its lowest level in more than a week, and the ^JNK^ (below).

JNK Chart

Like HYG, shares of the JNK have also made new short-term lows. JNK closed on Monday at its most oversold since rallying from the 200-day moving average in late August.

Two country funds have joined a growing number of country funds that have pulled back to oversold territory above the 200-day. These ETFs include European representative such as the ^EWP^ and the ^EWQ^ (below).

EWQ Chart

Shares of EWQ actually closed in oversold territory above the 200-day for two days in a row last week before bouncing modestly back into neutral territory. The pullback on Monday was just enough to pull the ETF into oversold territory ahead of Tuesday’s trading.

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David Penn is Editor-in-Chief at TradingMarkets.com.