European debt crisis?! What European debt crisis?!
iShares MSCI France Index Fund
iShares MSCI Germany Index Fund
Both EWQ and EWG have closed higher for four out of the past
five trading days. The French fund was up just shy of 3%, while the
German fund added more than 3%. Even the
iShares MSCI Italy Index Fund
) has gotten into the act, also up four out of the past five
sessions and adding more than 3% ahead of trading on Friday.
What does all this mean to traders? All three of these ETFs are
trading below their 200-day moving averages, a dangerous place
historically speaking, for short term rallies. More often than not,
short term rallies beneath the 200-day moving average are
unsustainable and tend to result in similarly short term reversals
back to the downside when these rallies rech overbought levels.
And the higher these funds climb below the 200-day moving
average, and the deeper into overbought territory they trade, the
more likely those short-term reversals will be.
Traders looking for opportunities to buy into the fear in Europe
may be able to pick up funds like these at lower prices - or, at
least, at less overbought conditions - in the next few days if
history is any guide. And those who see opportunities in the
possibility of these funds moving lower are increasingly seeing the
edges shift toward their side.
A quick note on the exchange-traded funds from last week. Both
the technology-related funds - the
Direxion Technology Bull 3X Shares
) and the
ProShares Ultra QQQ
) - have since made signficant gains. Three days after making our
5 ETFs for the Next 5 Days
roster, shares of TYH were up 11%, while QLD gained more than
The gold funds from last week's list have moved up from oversold
territory, with both the
SPDR Gold Shares
) and the
iShares COMEX Gold Trust
) gaining approxaimately 1% ahead of trading on Friday.
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is Editor in Chief of TradingMarkets.com