All of the major U.S. equity index ETFs are set to open in oversold territory when trading begins on Monday. This includes the ^SPY^, the ^QQQ^ and the ^IWM^.
Traders have been especially aggressive in selling both emerging markets and financial ETFs. Exchange-traded funds from these groups represent many of the markets that traders will be watching when trading begins on Monday.
Remember if you are looking for quantified strategies for trading exchange-traded funds, then be sure to join Larry Connors this Wednesday, May 18th for a special, look at the new Machine ETF Trader. Now you can build your own “quant” portfolio of ETF trading strategies using the science of The Machine. Click here to learn more.
Here are 7 ETFs You Need to Know for Monday.
Heading into trading on Monday, emerging markets ETFs have some of the bigger edges among country funds.
This includes the pullback in the ^EZA^ that took the fund down by more than 2% in trading on Friday. The ETF has closed in oversold territory for three days in a row and is only a few points above its 200-day moving average.
Also extremely oversold heading into Monday’s open is the ^EWY^ (below).
Down 2% on Friday, shares of EWY have closed lower for three days in a row, with all three closes in oversold territory above the 200-day.
The ^UYG^ (below) pulled back by well over 2% ahead of trading on Monday, reflective of the growing weakness in the sector.
Also in oversold territory above the 200-day are the ^XLF^ and the ^KRE^.
For traders focused on leveraged ETFs, the ^ERX^ (below) have closed lower for three days in a row.
Follow-through selling to the downside early in the week could put the ERX in oversold territory over the next few days.
While the leading gold mining ETFs have closed below their 200-day moving averages, ^SIL^ has remained above that level during its pullback. This is despite SIL closing lower for four days in a row ahead of trading on Monday – the last three in oversold territory.
David Penn is Editor in Chief of TradingMarkets.com