Market Overview

ETFs to Watch This Week

Last week was another week at the central bank office for stocks and ETFs. Stocks rallied on Friday, but closed with a weekly loss as investors were again left to ponder when additional monetary easing will arrive.

As has been par for the course, Federal Reserve Chairman Ben Bernanke said the central bank stands ready to act. However, Bernanke stopped short of making the announcement nearly everyone wants to hear: That more quantitative easing is on the way. With no official announcement on QE3, traders are left pointing to the Fed's next meeting in mid-September as a possible release date for for QE3.

By that time, Bernanke's hand might be forced. The August jobs report, due out next Friday, and September's tradition of being unkind to stocks could prompt the Fed to launch QE3. For now, traders will have to wait and see, but the following ETFs have the potential to excite in some form or fashion this week.

iShares Gold Trust (NYSE: IAU) The iShares Gold Trust finished the week higher by almost 1.5 percent, but that gain was entirely attributable to Friday's Bernanke-induced 2.2 percent pop. With the Eurozone debt crisis still front and center in the eyes of many investors, a strong case can be made that gold does not necessarily need QE3 to move higher. On the other hand, it is obvious additional dollar-depressing stimulus would be a boon for hard assets such as gold.

On better than double the average daily volume on Friday, IAU closed at its highest level since April. IAU is benefiting from the hope that QE3 will arrive and as long as Bernanke does not overtly rule the idea out, the yellow metal does have near-term upside.

Global X SuperDividend ETF (NYSE: SDIV) SDIV closed the week on a down note, but only modestly so, and it seems to be going unnoticed that volume in this ETF is on the upswing. For example, SDIV gained 0.6 percent on Friday on turnover that was nearly triple the daily average.

What cannot be ignored is a trailing 12-month yield on SDIV of almost eight percent. That is more than quadruple the dividend yield on the SPDR S&P 500 (NYSE: SPY). With dividends still in style and volume increasing, SDIV could print a new 52-week high as soon as next week.

Market Vectors Steel ETF (NYSE: SLX) With all the talk of a slowing Chinese economy, the Eurozone's ills and sluggish growth in the U.S., it is not surprising the Market Vectors Steel ETF has been pummeled. The fund is down 16.4 percent year-to-date, making an endorsement of the fund's fundamentals a tricky proposition. Fundamentals aside, SLX does offer an alluring technical setup for the aggressive trader. If the ETF once again finds support in the $40-$41 area, it could have upside to $45-$46.

Direxion Daily Emerging Markets Bear 3X Shares (NYSE: EDZ) There are still individual opportunities worth considering within the emerging markets ETF universe, but the overall near-term outlook for the group is cloudy. India's GDP report earlier this week failed to illicit any excitement. China bulls are stuck in the same spot U.S. investors are and that is hoping for easing and or interest rate cuts.

In other words, there is more potential for disappointment than pleasant surprise out of broader emerging markets ETFs. EDZ offers short-term protection from that trend at a decent price.

For more on ETFs, click here.

Posted-In: Long Ideas News Sector ETFs Broad U.S. Equity ETFs Short Ideas Dividends Dividends Specialty ETFs Best of Benzinga

 

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