High Probability ETF Trading: 7 ETFs You Need to Know for Wednesday (EWM, ITB, XHB, VEA, EPP, SPY, ERY)

With the ^DIA^ being the only major U.S. equity index ETF trading in oversold territory, traders will find largely neutral conditions in the ETF market domestically. Around the world, weakness in Asian country funds in particular continues, though a number of country funds from Europe are also in or near oversold conditions above the 200-day.

Here are 7 ETFs You Need to Know for Wednesday.

The ^EWM^ edged higher on Tuesday after pulling back for five consecutive sessions. Despite Tuesday’s action, the ETF remains deeply oversold above the 200-day moving average.

Homebuilding is among the more oversold sectors as of midweek, with both the ^ITB^ and the ^XHB^ (below) closing lower for a second day on Tuesday.

XHB chart

Both ITB and XHB closed down by more than 1% on Tuesday and are oversold above the 200-day moving average.

Weakness in international markets overall is being expressed by oversold conditions in regional funds like the ^VEA^ and the ^EPP^ (below).

EPP chart

EPP is back in oversold territory above the 200-day moving average after a two-day rally brought the fund up from even deeper oversold levels from late last week.

Shares of the ^SPY^ pulled back from exceptionally overbought territory above the 200-day moving average into neutral territory ahead of trading on Wednesday.

SPY chart

SPY has not closed in oversold territory since the end of January. The ETF has closed above its 5-day moving average every session in February.

One day after pulling back into oversold territory, the ^ERY^ rallied by more than 3%. ERY was among the exchange-traded funds highlighted in yesterday’s 7 ETFs You Need to Know.

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