A Look Ahead: This Week's ETFs to Watch

Coming off a volatile week that saw stocks swing between gains and losses due to eurozone flare-ups and the U.S. sequestration issue, investors could be in for more of the same in the week ahead. Stocks are flirting with record highs, but signs are abound that this rally is being challenged and that a near-term pullback is imminent. For example, technology and small-cap names are not showing leadership ability. On a related note, investors continue to favor value names over growth fare, pouring money into sectors such as consumer staples and utilities despite valuations that are at the high end of historical norms. Not to mention, the broader emerging markets universe has been disappointing to say the least this year. With caution signs easy to spot, the rally's mettle will again be tested this week by issues foreign and domestic, a list that includes the February jobs report due out Friday. The following ETFs will be among those that will be in play throughout the week.

No, the Global X FTSE Greece 20 ETF is not the biggest nor the most heavily traded Europe ETF on the block. However, plenty of eyes should be on GREK following news that index provider Russell Investments has demoted Greece to emerging markets status, citing the country's unsustainable debt levels. Russell promoted Greece to developed market status just 12 years ago. Greece becoming an emerging market

, so this is news is not altogether surprising. The issue for GREK, however, is how many index providers decide to follow Russell's lead. MSCI

already has Greece on its list

. If some combination of MSCI, FTSE and Standard & Poor's demote Greece in the near-term as well, that could spell bad news for GREK.

As was noted earlier, investors have been favoring value over growth, seemingly on the basis that sectors such as staples will decline less in the event of a correction. That is not the only reason to keep a close eye on the Consumer Staples Select Sector SPDR and related ETFs in the days and weeks ahead. First, some market participants view inflows into an ETF such as XLP as a sign of investors' nervousness. Second, Procter & Gamble

, Philip Morris

and Colgate Palmolive

are all trading within pennies of their 52- week highs, implying upside from here may be limited. On a related note, XLP has a P/E ratio of almost 16.5,

. By comparison, the P/E ratio on the Technology Select Sector SPDR

is just over 13.

Here is how things are shaping up in the near-term for EEM. The latest China PMI report indicates that country's rebound may be slower than previously hoped. China is almost 17.8 percent of EEM's weight. South Korean equities have been laggards in Asia this year. That country is 15.2 percent of the ETF's weight. Practically nothing has gone right with Brazilian stocks this year and that is another 12.6 percent of EEM's weight. Not much is going well for Indian stocks and

. India has a 6.4 percent allocation in EEM. Bottom line: Nearly half of EEM's country weights are not the most attractive places to invest in the emerging markets, providing headwinds for EEM and related diversified emerging markets ETFs. For more on ETFs, click

.