High Probability ETF Trading: 7 ETFs You Need to Know for Wednesday (GDX, GLD, DGP, SLV, EWA, RSX, UYM)

Gold, gold, gold. While sellers became more aggressive in commodity markets in general, it was the sell-off in gold-related stocks and exchange-traded funds that attracted the most attention for traders heading into the middle of the week.

Outside of commodities, newly oversold conditions in ETFs as diverse as the ^XRT^ and the ^XHB^ may warrant attention for traders looking for weakness in the ETF market above the 200-day moving average.

Here are 7 ETFs You Need to Know for Wednesday:

The most oversold ETF in our database is the ^GDX^ (below).

GDX chart

Shares of GDX pulled back by more than 2% ahead of trading on Wednesday, closing lower for a second day in a row.

GDX represents gold mining stocks. But the current pullback in gold includes the market for bullion, as well. Tracking the bullion price of gold are the ^GLD^ and the leveraged ^DGP^ (below).

DGP chart

DGP dropped by more than 4%, closing at its most oversold level since mid-December.

The sell-off in gold extended to fellow precious metal silver, as well. Pulling back for a second session, the first in oversold territory, was the ^SLV^.

SLV chart

SLV has closed lower for three out of the past four trading days heading into Wednesday’s open.

Amid the commodity pullback, the ^EWA^ pulled back by more than 2% to close in oversold territory above the 200-day moving average. In contrast, the ^RSX^ added well over 1% to close higher for a second trading day in a row.

Overbought conditions in the basic materials sector, as noted in yesterday’s 7 ETFs You Need to Know, have begun to encourage profit-taking in ETFs like the ^UYM^. UYM closed lower on Tuesday after closing higher for five days in a row.

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