Technical Trading: A Look At Nine Market Moving ETFs

David Fry:  Markets overall are in a neutral position held back by inflation worries but supported by Fed policies and M&A. Everything else is nonsense barring another “Black Swan” event.

Below is our review of the top market moving ETFs for the week .

US SECTOR ETF: SPDR S&P 500 ETF (NYSE:SPY)

SPY ended the week at resistance levels from February. Weekly 5- and 10-period moving averages have not turned up yet. Similarly, the Money Flow Index (MFI) has been declining since the week of February 18th indicating light volume conditions and some tentativeness. Overall market volatility has increased from recurring effects of MENA, QE2 (POMO), and now rising energy and commodity prices.

What to watch out for next week: Will earnings reports from ALCOA (NYSE:AA) on Monday be positive enough to push SPY through resistance levels? Further Retail Sales and the CPI/PPI reports are also in focus.

Watch SPY in Video: 0:21 – 2:09

FIXED INCOME ETF: iShares Barclays 20+ Year Treas Bond ETF (NYSE:TLT)

Based on weekly charts, 5- and 10-period Moving Averages and Demark indicators show TLT is reversing course from its bounce begun in mid-February. Why? The war between the Fed which wants lower interest rates for an indefinite period and bond vigilantes in trading pits continues. While the Fed argues for a continuation of lower interest rates, bond investors are concerned about inflation and what it means to yields. They are selling bonds. Sellers in the bond pits could have a greater influence on Fed policy than the Fed itself.

What to watch out for next week: Will inflation concerns remain high so as to continue putting pressure on bond prices as yields rise?

Watch TLT in Video:  2:10 – 3:34

CURRENCIES: PowerShares DB US Dollar Index Bearish ETF (NYSE:UDN)

The Dollar Index (DXY) has been declining since June 2010. DXY is falling (UDN Bearish Dollar rising) and is now at its lowest support level of around 75 from November 2009. If DXY breaks below 75, then Uncle Buck will be in uncharted waters. Since commodities are priced in dollars, and as long as the dollar declines, commodity prices will rise.

What to watch out for next week: Will commodity and crude oil prices continue to rise with the former pushing through the 120 mark? The PPI & CPI data will have an impact along with crude oil inventories.

Watch DXY and UDN in Video: 3:35 – 5:16

PRECIOUS METALS: SPDR Gold Shares ETF (NYSE:GLD) & PowerShares DB Gold Double Long ETN (NYSE:DGP)

As the dollar fades precious metals rise. Sometimes it’s just that simple; however, there may be something more serious as trust in U.S. monetary policy remains low. Naturally, this trend is supportive to silver markets as well as investors seek a safe haven to hedge currency risk.

What to watch out for next week: CPI & PPI data will be much watched and will indicate inflation no matter what the bogus “core” rate reflects to pundits so inclined.

Watch GLD & DGP in Video: 4:48-5:44

ENERGY & CRUDE OIL: United States 12 Month Oil ETF (NYSE:USL) & ProShares Ultra DJ-UBS Crude Oil ETF (NYSE:UCO)

Investors are concerned by the sharp rise in crude oil and other associated energy ETFs. The sharp rise of gas at the pump is a drag on consumer sentiment and spending. Unrest among key producers in MENA & Nigeria haunts energy traders. Further, the decline in the dollar is also bullish for oil prices since the products are priced in dollars.

What to watch out for next week: Obviously the dollar’s bearish trend isn’t helping investors. Further pay attention to energy inventories on Wednesday the 14th. These will be closely watched.

Watch USL & UCO in Video: 5:44-6:58

INTERNATIONAL: iShares MSCI Emerging Markets Index (NYSE:EEM) & Direxion Daily Emrg Mkts Bull 3X Shares (NYSE:EDC)

Emerging markets are pushing higher primarily due to increasing rapidly developing economic growth. Many EM’s gain with the rise in commodity markets; however, some countries like India are net importers of most commodities. Countries benefiting the most include Indonesia, Malaysia, Brazil, Russia and Australia.

What to watch out for next week: Investors should pay attention to commodity prices overall including base metals prices and economic data particularly from most BRIC countries.

Watch Video: EEM & EDC 6:58 – 8:26

ETF Market Wrap from David Fry on Vimeo.

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