Sellers returned to the markets on Monday, creating renewed oversold conditions in ETF markets like the SPDR S&P 500 ETF (SPY), which closed at its lowest levels since November 2009.
Continued selling in many markets has pushed a number of exchange-traded funds that had been trading above their 200-day moving averages below them in recent days. Among these ETFs that high probability ETF traders should be steering clear of for the time being are funds like the Utilities Select Sector SPDR Fund (XLU) and the iShares Silver Trust (SLV).
Here are 7 ETFs You Need to Know for Tuesday.
Among the top ETF PowerRatings funds for tomorrow is the iShares MSCI South Korea Index Fund (EWY). EWY maintained its top 10 ETF PowerRating throughout the course of the trading day on Monday.
One of the biggest ETF PowerRatings upgrades during Monday's trading was the upgrade from 5 to 8 in the iShares MSCI Canada Index Fund (EWC).
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Increasingly oversold above the 200-day moving average is the iShares MSCI Emerging Markets Index Fund (EEM). EEM is one of the most oversold funds in our database, with the Market Vectors Russia ETF (RSX) as the only country fund more oversold than EEM.
Among the most overbought ETFs in our database is the ProShares Short Dow 30 (DOG). ETF markets that become overbought below the 200-day moving average have tended to underperform in the short term, according to our research on exchange-traded funds. DOG had closed in overbought territory below the 200-day moving average for three consecutive days as of the Monday close.
Evidence of this tendency can be seen in the continued decline in the iShares FTSE/Xinhua China 25 Index Fund (FXI) which closed lower by well over 3% on Monday. FXI became overbought below the 200-day moving average for three days in early February and has since closed down for two out of the past three days.
Is a pullback in the U.S. dollar around the corner? Increasingly overbought above the 200-day moving average is the PowerShares DB US Dollar Bullish Fund (UUP).
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