On Wednesday, the United States will celebrate its birthday.
The day off will give traders and investors an opportunity to
relax.
Those looking to initiate new ETF positions
can evaluate some of leaders and laggards
from the first half of the year. A worthy endeavor to be sure,
but there are some funds that play into the Independence Day
theme that are worth a look, both from the long and the short
side.
iShares MSCI United Kingdom Index Fund (NYSE:
EWU
)
The iShares MSCI United Kingdom Index Fund is an obvious choice
for a list of Fourth of July ETFs. Despite the Barclays (NYSE:
BCS
) scandal, EWU is holding up nicely. That stock does not figure
prominently in the ETF's weight, but the fund is nearly 18
percent-allocated to financials. Another 20 percent of EWU's
weight is devoted to energy stocks, implying that this fund is
not for the faint of heart.
The U.K.
is in a recession
. That said, EWU has been bucking some negative headwinds and
moving higher lately. Perhaps the fund's bullishness is due to
the expectation that the Bank of England will lower interest
rates or engage in more monetary easing following its meeting
Thursday. Or maybe it is a pre-Olympics bounce.
Whatever the reasons are for EWU's bullishness, there is no
getting around the fact that economic growth is slowing in the
U.K. and that will eventually catch up with this ETF.
Teucrium Corn Fund (NYSE:
CORN
)
Before biting into that corn-on-the-cob at a Fourth of July
barbecue, it would be wise to think about how to make money on
corn. Thanks to CORN, ordinary investors need not try their hands
at corn futures trading, though this fund does not skimp on
volatility.
On June 4, CORN was flirting with its 52-week low. Since then,
the fund has surged almost 25 percent as commodities traders
speculated (and rightly so) that hot summer weather could mean
tighter corn supplies. On June 25, the USDA would confirm that
the U.S. corn crop was in dire straits, with drought conditions
in some areas approaching levels not seen in more than two
decades.
For those that like to
play seasonal trends with ETFs
, CORN fits the bill. The fund, which debuted in June 2010,
rallied in the June-August time frame last year only to have sold
off when September rolled around. There are no guarantees that
this will happen this year, but for now at least, the path of
least resistance with CORN appears higher.
First Trust ISE-Revere Natural Gas Index Fund (NYSE:
FCG
)
There is no direct correlation between natural gas and
Independence Day, but it would not be unreasonable to assume that
the founding fathers would be pleased that the U.S. is the
world's dominant producer of the clean-burning fuel.
With energy stocks
sporting some alluring valuations
and natural gas prices moving higher, there might be a perfect
storm on the way to move FCG higher. As it is, the ETF has jumped
more than 12 percent in the past five trading days.
Direxion Daily Semiconductor Bear 3X Shares (NYSE:
SOXS
)
Consider the Direxion Daily Semicondct Bear 3X Shares (NYSE:
SOXS
) one to mull over in the coming days. There is no denying tech
has been a decent place to be recently and there is no glossing
over the fact that the PowerShares QQQ (NASDAQ:
QQQ
) has been a solid performer as a result.
However, traders cannot afford to ignore that the traditional
period of seasonal weakness for semiconductor stocks is just a
few weeks away. SOXS may not be buy on July 5th or 6th, but it is
worthy of a place on investors' ETF watch lists.
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