iShares MSCI USA Momentum Factor ETF (NYSE:
Momentum stocks were some of the hardest-hit areas of the
market last week -- as high flying biotech, consumer
discretionary and technology names fell precipitously. MTUM
is designed to choose a subset of large and mid-cap stocks that
have the highest excess returns over the last 6 and 12-month time
Despite the weak opening on Monday morning,
these market leaders
have the opportunity to turn around their recent misfortunes if
we see stabilization in the broader market. The relative
strength for momentum stocks has now moved into oversold
territory, and many traders are watching these names carefully
for indications of a bounce that may signal a short-term
Related: Dividend ETFs Continue Their Winning
Materials Select Sector SPDR Fund (NYSE:
Materials stocks are likely to be closely followed this week,
as Alcoa Inc (NYSE:
) unofficially kicks off earnings season on Tuesday with the
release of their quarterly results. The materials sector
has been a leader on the upside this year, primarily due to
higher commodity prices for producers of base and industrial
metals. Alcoa represents approximately 2.3 percent of
the underlying holdings in XLB.
XLB hit a new all-time high last week, but has fallen prey to
broader market weakness over the last two trading sessions.
A positive earnings catalyst from Alcoa may be just what
this sector needs to regain its footing and resume its upward
iShares MSCI Emerging Market Small Cap Index Fund (NYSE:
Emerging markets have been relatively insulated from the
recent volatility in the domestic markets, and small cap stocks
in particular have been star performers. EEMS tracks 651
small cap stocks from developing markets such as Taiwan, South
Korea and China.
Since the beginning of March, EEMS has gained 4.58 percent
compared to a decline of 1.80 percent for the iShares Russell
2000 ETF (NYSE:
). ETF investors may be looking to diversify away from the
high valuations associated with domestic small cap stocks into
areas the offer a more attractive long-term growth opportunity.
It remains to be seen if further selling will spill over into
international markets, but for the moment they appear to be
holding up quite well.
SPDR Gold Shares ETF (
Gold bullion also faces a key test of resolve this week. as
Wednesday brings the release of Federal Reserve meeting minutes.
The price of the yellow metal
has been falling relentlessly
since the previous Fed notes indicated additional asset purchase
tapering along with future policy tightening. A slight
relief rally last week has propped up GLD near its 200 and 50-day
GLD now sits at a crossroads of technical support, that needs
to hold if
want to resume their uptrend and avoid re-testing the 2013
lows. Safe haven buying and strong consumer demand from
Asia have been the primary growth themes for this sector in
2014. However, gold still has some hurdles to climb to
regain its positive momentum.
© 2014 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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