David Penn's  Instablog

David Penn
Send Message
David Penn is Editor in Chief of TradingMarkets.com.
My company:
My book:
Larry Connors: Short Term Trading Strategies That Work
  • 5 ETFs for the Next 5 Days (SMH, QQQQ, FAZ, ERY, EWS) 0 comments
    Dec 14, 2010 12:59 PM | about stocks: XRT, JNK, SMH, QQQ, SPY, FAZ, ERY, EWS

    By way of update from this morning's 7 ETFs You Need to Know for Tuesday (read the full column at TradingMarkets.com here), retail has retained its bias toward the oversold - see the S&P Retail SPDRS ETF (NYSEARCA:XRT) - while high yield corporate funds like the SPDR Lehman High Yield Bond ETF (NYSEARCA:JNK) have begun to rally after pulling back from overbought conditions mentioned in last week's report.

    This week the focus begins to shift toward technology and the Nasdaq. 

    Looking forward, traders may want to keep an eye on technology funds for potential profit-taking.  The Semiconductor HOLDRS ETF (NYSEARCA:SMH) is the most oversold technology ETF, and looks likely to pull back for three days in a row.  

    Any weakness in technology likely means weakness for the Nasdaq 100.  This will keep the PowerShares QQQ Trust ETF (QQQQ) on the radar of high probability ETF traders in the near term. Unlike the SPDR S&P 500 Trust ETF (NYSEARCA:SPY), the QQQQ pulled back on Tuesday into neutral territory.

    Selling is arguably well-overdone in the Direxion Financial Bear 3x Shares (NYSEARCA:FAZ).  The 3-to-1 leveraged fund has closed in oversold territory for three days in a row and looks likely to close again in oversold territory on Tuesday.

    Also among the most exceptionally oversold of the leveraged ETFs is the Direxion Energy Bear 3x Shares (NYSEARCA:ERY), which returned to oversold territory intraday on Tuesday.  Traders using leveraged ETFs for short term trades should consider cutting their trading size proportionately to avoid more exposure than is wanted.

    Even the most oversold country fund right now, the iShares MSCI Singapore Index Fund ETF (NYSEARCA:EWS) is trading in neutral territory above the 200-day.  The fund has been rangebound since the beginning of the month.

    Let Larry Connors show you how to build a professional, balanced high performing portfolio of stocks and ETFs.  Click here to learn more.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: XRT, JNK, SMH, QQQ, SPY, FAZ, ERY, EWS
Back To David Penn's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


More »
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.