Market Overview

A Look Ahead: Next Week's ETFs to Watch


Stocks ended the week in fine fashion as traders bought dips seen in previous session and ignored a Moody's downgrade of France's three largest banks. There was less bad news out of Europe as policymakers reached an agreement to bolster Euro Zone budget rules. A temporary Band-Aid when a tourniquet is needed, but something is better than nothing these days regarding Europe.

There was some good economic news on Friday as the Thomson Reuters/University of Michigan preliminary consumer confidence reading for December showed an increase to 67.7 from 64.1 in November.

Combine that with no overtly negative headlines out of Europe and the Dow Jones Industrial Average finished higher by 1.4% for the week and the S&P 500 and Nasdaq each added almost 1%. That's good, but we're still a long way from being out of Europe's woods and this is yet another weekend fraught with headline risk. With that, let's have a look at some ETFs that will definitely be in play next week.

iShares Dow Jones Transportation Average (NYSE: IYT): The iShares Dow Jones Transportation Average is usually volatile and has utility for short-term traders and Dow theorists alike, but the ETF is of particular importance next week not only as a way of confirming the Dow Jones Industrials' next move but also because FedEx (NYSE: FDX) reports earnings before the bell on Thursday. Can you say economic bellwether? IYT has some room to run before resistance at $92.

Market Vectors Coal ETF (NYSE: KOL): Speaking of earnings reports, we revisit an old favorite, the Market Vectors Coal ETF. That's because Joy Global (Nasdaq: JOYG), KOL's largest constituent at almost 11% of the ETF's weight, reports before the bell on Wednesday. Joy Global's last earnings update featured blowout numbers and stellar guidance. Will the trend continue?

iShares MSCI Brazil Index Fund (NYSE: EWZ): According to ETF Channel, EWZ saw an outflow of almost $59 million this week, but the embattled king of Brazil-specific ETF clawed its way to a small gain for the week. EWZ faces technical headwinds as it tries to scrape its way 10% to its 200-day line and 24% to its 52-week high. The former could fall in a week or two. We're not betting on the 2011 high being seen again this year.

Consumer Staples Select Sector SPDR (NYSE: XLP): Take a look at the stocks that have been making new 52-week highs recently and chances are a fair amount of them are members of XLP's lineup. Yes, boring can be beautiful and XLP is probably 10% or more away from the next material resistance area.

iShares MSCI EMU Index Fund (NYSE: EZU): Let's see. An ETF with almost 260 stocks whose biggest sector weight is to financials and all 10 of the ETF's country weights are Euro Zone members. Sounds like an ETF to keep an eye, right? EZU is vulnerable below $28 and even more so below $26.

Posted-In: Earnings Long Ideas News Sector ETFs Broad U.S. Equity ETFs Short Ideas Specialty ETFs New ETFs


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