ETF Outlook for the market and ETFs for the week of October
New Highs for Stocks - SPDR S&P 500 ETF (NYSE:
A new all-time high for the S&P 500 to end the week as the
market preps to move into the best 6 months of the year. Now that
the "sell in May and go away" part of the year is about to expire
at the end of October, investors can forget about the old Wall
Street indicator. That being said, it does not suggest the market
will not experience some rough patches before next May.
In the short-term, SPY has been up 12 of the last 14 sessions
and is due for a pullback from an oversold level. Initial support
for SPY will be at $173.50, or a 1.5 percent pullback from
Friday's closing price. Do not be shocked to see the ETF drift
even lower in the days ahead as money shifts at the end of the
month. The next support level to watch is the $171 area.
Long-term, the trend is extremely bullish and all pullbacks are
still considered buying opportunities.
Technology is Hot - SPDR Technology ETF (NYSE:
Recent breakouts by large-cap tech stocks like Google (NASDAQ:
), Microsoft (NASDAQ:
), and Amazon.com (NASDAQ:
) have XLK sitting at its best closing price ever. The
combination of decent valuations and above-average earnings
growth has investors rushing into the sector in 2013. For the
year the ETF is up 16 percent.
Chasing the recent surge in the sector is not the best option
for investors, a better strategy would be to look for some
weakness in the coming days to begin building a position. It is
important to note that Apple (NASDAQ:
) makes up 15 percent of the ETF and is the single largest
holding. If AAPL makes any big moves in either direction it will
have a direct affect on the ETF.
The Mystery that is Gold - SPDR Gold ETF (NYSE:
Over the last 10 month GLD has been a great underperformer as
the price of gold remains in a long-term downtrend. The ETF has
fallen by nearly 20 percent this year and the charts have yet to
signal the end of the trend. That being said, over the last two
weeks the precious metal has bee rallying after as investors lean
towards more Fed stimulus into next year.
The million-dollar question is whether this is a short-term
bounce or the beginning of a new uptrend. While in the short-term
the ETF has showed some creative patterns, the long-term chart
shows the recent action as merely a short-term bounce. The levels
to watch on GLD are $132.78 on the upside and support lies at
The Dividend Comeback - Global X Super Dividend ETF (NYSE:
An ETF that offers investors exposure to 100 stocks from
around the globe and also pays a dividend yield of 7.45 percent
sounds like a must-own. SDIV does just that as it invests in 100
of the highest dividend yielding stocks in the world. The largest
exposure is to the U.S. at 27 percent, followed by Australia at
19 percent, and the U.K. at 12 percent.
The ETF has lagged the U.S. market this year with a gain of
9.4 percent, but closed out last week 3 cents from a new
multi-year high. The middle of the year was not kind to the ETF
as income-producing investments were hurt as interest rates
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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