High Probability ETF Trading: 7 ETFs You Need to Know for Wednesday (USO, EWM, IAU, QQQQ, EWU, EWZ, FXE)
Financials pulled back heading into midweek, but it was the selling in commodities – especially oil and gold – that is creating the most widespread oversold conditions in the ETF market. The ^GDX^ has been sold so aggressively as to fall below its 200-day moving average for the first time since July 2010.
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Here are 7 ETFs You Need to Know for Wednesday.
Next to the iPath S&P Goldman Sachs Crude Oil Trust Index ETN mentioned in yesterday’s 7 ETFs You Need to Know, the ^USO^ is the next most oversold commodity fund still trading above its 200-day moving average. Shares of USO have closed lower for six straight trading days heading into Wednesday’s trading.
Down five consecutive trading days, the ^EWM^ (below) is the most oversold country fund in our database.
All five of the ETFs’ most recent closes have been in oversold territory above the 200-day. EWM is more oversold now than it has been at any point since the early summer of 2010.
In addition to some of the oversold gold-related ETFs noted in yesterday’s column, the ^IAU^ (below) continues to trade in oversold territory above the 200-day moving average.
Shares of IAU have closed lower for three out of the past four trading days. IAU has been trading above its 200-day moving average for more than a year.
In following-through to the upside after Monday’s oversold bounce, the ^QQQQ^ finds itself back in overbought territory – barely – above the 200-day moving average.
Trading on the edge of oversold territory above the 200-day moving average are country funds like the ^EWU^ and the ^EWZ^ (below).
Shares of EWZ have closed lower for four out of the past five trading days heading into Wednesday’s open.
The most overbought ETF in our database is the ^FXE^, which has closed higher for 11 consecutive trading days and rallying to its highest level since November 2010.
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David Penn is Editor in Chief of TradingMarkets.com