Market Overview

4 Global ETFs That Could Fall 10% Or More

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ETFs to Watch March 18, 2013 (EPV, IAU, TLT)

Look around world and it's getting harder and harder to find safe havens with country-specific ETFs these days. It's not just Europe that's the problem, though it should be noted the ProShares UltraShort MSCI Europe (NYSE: EPV) is looking particularly stylish these days.

There's a plethora of problems on every other continent, too. Well, Antarctica gets a pass because penguins and polar bears haven't yet discovered the wonders of sovereign debt, credit default swaps and no traders from J.P. Morgan Chase (NYSE: JPM) live there.

The charts don't lie. The Vanguard Total Stock Market ETF (NYSE: VTI) is a mess. The all world ex-U.S. equivalent, the Vanguard Total International Stock Index ETF (Nasdaq: VXUS), has an uglier chart and uglier recent performance.

With that, let's play "Dora the Explorer" and go searching for some country-specific funds that could fall another 10% from their current levels.

Market Vectors Indonesia Index ETF (NYSE: IDX) Around here, we don't pretend to be Monday morning quarterbacks. In other words, we own up to our flubs. Have we previously made bullish comments about Indonesia?

Yes, and we're not going to run away from those comments or even change course. That said, IDX, the largest Indonesia ETF, closed just above $28 today and the chart indicates there's a gap from October that needs to be filled in. That wouldn't represent a 10% decline, but the charts of IDX and the iShares MSCI Indonesia Investable Market Index Fund (NYES: IDX) are bearish and a 10% decline for both is not out of the realm of possibility.

iShares MSCI Brazil Index Fund (NYSE: EWZ) We nailed this one, saying earlier this month that EWZ was getting dangerously close to bear market territory. That forecast has proven accurate. EWZ closed just above $54 on Monday, but the chart is so weak that a return to the October 2011 low below $49 is possible.

There are macroeconomic concerns facing Brazil right now and problems pertaining to some of EWZ's marquee holdings that say the path of least resistance here is lower.

iShares MSCI France Index Fund (NYSE: EWQ) If there was anyone reason to be bullish on the iShares MSCI France Index Fund (NYSE: EWQ), it may have gone out the window with Monday's 2.6% drop on volume that was better than double the daily average. France's fundamental woes are well known now and EWQ's technical outlook is downright dreary at moment.

iShares MSCI New Zealand Investable Market Index Fund (NYSE: ENZL) The unheralded iShares MSCI New Zealand Investable Market Index Fund has sharply outperformed the iShares MSCI Australia Index Fund (NYSE: EWA) year-to-date, but with EWA showing vulnerability recently, it's hard to be bullish on ENZL.

New Zealand's retail sales fell in the first quarter, the kiwi is trading near multi-month lows and Reserve Bank governor Alan Bollard even acknowledged New Zealand's economy is vulnerable to a global downturn and deteriorating credit conditions in other countries. A slide of 10% or more for ENZL might be a tad ambitious, but this ETF is poised for more downside.

Posted-In: Long Ideas News Short Ideas Specialty ETFs Emerging Market ETFs Technicals Events Global Best of Benzinga

 

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