Ultimate PowerRatings Trading Report: Sell-Off Puts China, eBay, Financials on Sale

With growing pessimism over Greece on the one hand and executives from ^GS^ experiencing an excruciating day (and night) with Senator Carl Levin and the members of his Senate subcommittee on the other, traders were busy taking profits in a wide variety of markets.

This selling sent the PowerRatings of a sizable number of stocks, exchange-traded funds (ETFs) and leveraged ETFs soaring ahead of Wednesday’s trading. PowerRatings traders who have been patiently waiting for the market to pull back (as it always does sooner or later) have finally got their wish. Let’s take a look at some of the opportunities that may be developing, staring with stocks.


A broad-based sell-off means that even the blue chips of the S&P 500 and the Nasdaq 100 can be among some of the higher rated stocks for short term traders to consider. One example of these kinds of stocks is ^EBAY^, which earned a Stock PowerRatings upgrade to 8 late in trading on Tuesday.

EBAY Chart

Trading at its lowest levels since early March, EBAY has already begun to retreat to levels from which stocks of its kind have historically rallied. This is based on our quantified testing of thousands of stocks going back more than a decade.

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Other well-known stocks earning top Stock PowerRatings ahead of Wednesday’s trading are ^C^, down well over 3% on Tuesday and closing lower for four days in a row, and ^AET^. Both Citigroup and Aetna earned Stock PowerRatings upgrades to 8 late in trading on Tuesday.

Exchange-Traded Funds:

For traders looking for opportunity in the exchange-traded fund (ETF) market, the good news is that most of the funds that earned major ETF PowerRatings upgrades on Tuesday were country funds. These include ETFs like the ^EPP^

EPP Chart

Other country funds for traders to keep an eye on are the ^VEA^ and the ^EWA^. All three of the exchange-traded funds mentioned earned our highest ETF PowerRatings of 9 and 10 respectively ahead of Wednesday’s trading.

ETF traders should know also that financial exchange-traded funds also came in for significant profit-taking on Tuesday and many earned ETF PowerRatings upgrades in the process. Included among these upgraded financial funds for short term traders are ETFs like the ^IYG^.

IYG Chart

IYG earned one of the biggest PowerRatings upgrades of the day in any category: stock, ETF or leveraged ETF.

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Leveraged ETFs:

When markets begin to sell off, some of the biggest beneficiaries are traders who scaled-in to top PowerRatings inverse leveraged funds as those funds earned higher and higher Leveraged ETF PowerRatings.

An excellent example of this has been the movement in the ^ERY^, which earned a Leveraged ETF PowerRating of 9 last Friday and closed higher by well over 8% on Tuesday alone.

ERY Chart

Given the focus and profit-taking in financials, it is no surprise that many of the leveraged ETFs earning top PowerRatings ahead of trading on Wednesday are financially oriented. This includes 2x leveraged funds like the ^UYG^ and 3x leveraged ETFs like the ^FAS^.

FAS Chart

Both UYG and FAS earned sizable Leveraged ETF PowerRatings upgrades to 9 late in trading on Tuesday.

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David Penn is Editor in Chief at TradingMarkets.com.