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Your ETF Investing Action Plan This Week: Big Week For Big Banks

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Happy Columbus Day, dear ETF investors. In honor of that illustrious forebear and intrepid voyager, let us discover potential movers and shakers within the world of exchange traded funds this week.

 

Q3 Earnings

Third-quarter earnings get underway in earnest Tuesday with Alcoa 's ( AA ) report. It's an especially big week for the big banks.

We can hope Wells Fargo ( WFC ) fares better on its earnings call Friday than Wells Chief Executive John Stump recently did before lawmakers.

Citigroup ( C ) and JPMorgan Chase ( JPM ) also report Friday.

Financial Select Sector SPDR ( XLF ) last week closed above the 50-day moving average - a marker of short-term health - for the first time in four weeks.

The big banks' earnings will play a role in whether XLF holds above that level or caves under, and whether or not it finally shakes off its year-to-date sloth.

Some big chip earnings are in the works too: Taiwan Semiconductor (TSM) on Thursday and Advanced Micro Devices (AMD) on Oct. 20.

U.K. chipmaker Dialog Semiconductor gave Apple (AAPL) shares a boost last week after reporting solid sales.

[ibdchart symbol="soxx" type="daily" size="half" position="leftchart" ]And tech ETFs with big stakes in Apple and its iPhone suppliers are showing bullish momentum. Among them: iShares PHLX Semiconductor (SOXX).

How could you not be dazzled by the chart?

 

Oil And Gold

Last week, two flagship commodity ETFs made headlines for very different reasons.

United States Oil (USO), which invests in near-month West Texas intermediate futures, made a three-month high. SPDR Gold Shares (GLD), which tracks the price of spot gold, fell to a four-month low.

The Organization of the Petroleum Exporting Countries (OPEC) is making the right noises about a production freeze. That's helping to boost "black gold," but any concrete action will be formalized only in November.

In the meantime, train your eyes on the USO chart. It may offer a buying opportunity at 12.55 if it successfully breaks out of a first-stage base .

Keep in mind this would be a turnaround story, rather than your typical growth story. USO is trading near its lowest level in a decade at 11.34, and there's no clear signal yet that crude oil is out of the hole.

Gold's hefty loss last week came amid a September jobs report that is likely to keep the Fed on course for a rate hike by year's end. That doesn't bode well in the near term for gold, which bears no yield.

This week, will GLD ETF reclaim the 200-day moving average or fall further under it? The former would be a bullish sign, the latter bearish.

However, Goldman Sachs sees a buying opportunity in the yellow metal if it gets even more tarnished.

You'll find room in your portfolio for gold if you think for a moment about the uncertainties in the stock and commodity markets.

Gold's a safe haven and a portfolio diversifier. Not to mention, shares of GLD are at $120 vs. $186 at the peak in 2011.

 

The Fed And Nothing But The Fed

The minutes from the September meeting of the Federal Reserve are on tap for Wednesday and Fed Chair Janet Yellen speaks Friday at a Boston conference, ponderously themed "The Elusive 'Great' Recovery: Causes and Implications for Future Business Cycle Dynamics."

IBD'S TAKE:How can you tell if a jobs report is too hot, too cold or just right? Markets may react negatively or positively on the day of the report, but the key for investors is to stay abreast of the market's prevailing trend. Visit IBD University for a primer on how to time the stock market and read The Big Picture column every day.

[ibdchart symbol="xlu" type="daily" size="half" position="leftchart" ]

Cue moves for rate-sensitive equity sectors, some of which have fallen off the proverbial cliff as expectations for a December rate hike grow.

Among the worst-performing S&P sectors last week were utilities, real estate and consumer staples. Will the minutes restore a spark to Utility Select Sector SPDR (XLU)?

How the times have changed for this once hard-charging, $7 billion sector equity ETF . Just look at the chart.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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