Portugal Heading Down, Gold Up, And The S&P For A Speedbump
ETF Outlook for Thursday, July 10, 2014
Investors should be ready for one of the worst opens this year for the stock market after a bevy of negative economic data from around the world hit the wires overnight.
Global X FTSE Portugal 20 ETF (NYSE: PGAL)
The Portuguese stock market was down another 4 percent last night after the country’s largest listed bank, Banco Espirito Santo, fell by 16 percent amid rumors its parent is considering bankruptcy protection. Over the last 7 trading days the stock market in Portugal is down 11 percent and the ETF has followed suit.
PGAL is set to open lower by another 2.5 percent this morning, which would drive the ETF to the lowest level since February.
Related Link: 3 ETFs Holding Strong During The Pullback
SPDR Gold ETF (NYSE: GLD)
The gold ETF is set to open at its best level since March and the underlying yellow metal is up about $20 per ounce this morning. The heavy selling in Europe has led to fears of a contraction in the continent and send investors into gold as a safe haven investment. The move today is a new short-term breakout and could send the ETF to the $135 area, from the $127.84 close of yesterday.
SPDR S&P 500 ETF (NYSE: SPY)
The broad market ETF is set to open lower by about 0.8 percent at the lowest level in a week. The panic will be rampant as the doomsday bears make their way back into the media calling for the bursting of the bubble. This crowd has been wrong for years and is likely wrong again as there are no signs of a bubble about to burst.
There is a good case the market is due for a pullback considering the SPY has only had two three-day losing streaks since February, and the largest pullback since April was the four percent weeklong sell-off in the beginning of the month.
Look for SPY to close lower today, unless something dramatic happens, and watch the following support levels: $194.25, $193.00, and $190.42. A pullback to the lowest support level would result in a 4 percent pullback from the all-time high. In the grand scheme of things a 4 percent pullback is like hitting a small speed bump.
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.