The death cross, the technical scenario in which a security's
50-day moving average crosses below the 200-day line, has claimed
plenty of ETF victims
in recent months.
In a weak market environment, the list is bound to get longer,
and that is exactly what is happening now. While the number of
ETFs and ETNs sporting the death cross condition is not yet
alarmingly high (less than 10 percent of the total
exchange-traded products universe fits the death cross criteria),
many current death cross funds share something in common.
That trait is a global flair, meaning the vast majority of
death cross ETFs are country-specific and multicountry funds. And
no, the death cross does not play favorites, as the list
currently is littered with developed and emerging markets ETFs.
Here are a few to be aware of.
Global X Brazil Mid Cap ETF
The iShares MSCI Brazil Index Fund (NYSE:
) is not the only
Brazil ETF with a gloomy technical outlook
. The Global X Brazil Mid Cap ETF (NYSE:
) has seen increased selling pressure in recent weeks and a death
cross took shape just a few days ago.
The Global X fund needs to hold support in the $14.30 area or
risk a return to $13 and then to the October lows around $12.25.
In defense of this ETF, it has outperformed its iShares rival by
a wide margin this year.
WisdomTree Commodity Country Equity ETF
The WisdomTree Commodity Country Equity ETF (NYSE:
) has not even been in death cross territory for a week, but it
is not a surprise addition to this infamous club. "Commodity"
being in the name of this ETF is one point that illustrates the
tough road this fund has traveled.
The ETF's country breakdown is another black mark. It offers
exposure to eight countries known for a producing an array of
commodities from copper to gold to oil. That lineup includes
Russia, Canada, Brazil and Australia. Look at the country ETFs
for those nations and it is easy to see why WisdomTree Commodity
Country Equity ETF is being taken to the woodshed. If it falls
below $27, $25 could be the next stopping point.
iShares MSCI Belgium Investable Market Index
It is not surprising that iShares MSCI Belgium Investable Market
Index Fund (NYSE:
found its way to death cross territory
. Perhaps the real question is what took so long?
The ratings agencies have
beaten up on Belgium
, and if $10 gives out, bearish traders will take their turn
adding to this ETF's pain. Below $10, $8 is a reasonable downside
target. In fairness to this fund, it has not officially joined
the death cross club, but it is very close to doing so.
iShares MSCI South Korea Index Fund
Like previous fund, iShares MSCI South Korea Index Fund (NYSE:
) is not officially a death cross ETF,
but it is getting pretty close
, as analysis courtesy of TradeWithPete.com indicates. On the
daily chart, Korea fund's 50- and 200-day moving averages both
meet just pennies above $55. So should the ETF notch consecutive
closes below that price point, the death cross probably would be
right around the corner.
This ETF is clinging to a year-to-date gain, making it seem
impressive compared to the 6.4 percent loss by the iShares FTSE
China 25 Index Fund (NYSE:
). Then again, it has been outperformed a true emerging markets
laggard, the iShares MSCI Taiwan Index Fund (NYSE:
). Translation: The death cross could mean big problems for
iShares MSCI South Korea Index Fund.
For more on death cross ETFs,
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