ETF Insider: Investors Shopping For Hope

Investors were left empty handed before the Thanksgiving Holiday; the Euro drama theme dominated financial markets last week as ongoing debt woes stemming from overseas overshadowed a host of positive economic data releases on the home front, including a surprise to the upside in durable goods orders. We anticipate for the spotlight to remain fixated on the Euro zone this week as well, while the super committee gridlock in Washington D.C. is the other critical roadblock holding back the bulls from reclaiming Wall Street.

Weekly Outlook

The coming week will see a host of economic releases both at home and on the international front, including several key unemployment reports from both sides of the Atlantic ocean. Below, we highlight ETFs that may see an increase in trading activity as relevant market data is released and evaluated by investors:

• Dynamic Retail ETF (PMR): U.S. consumer confidence data is expected to rise to 44.0 from a previously reported 39.8. PMR is likely to experience some volatility as investors digest how the consumer sentiment is holding up amidst the ongoing economic uncertainty.
• Market Vectors Germany Small-Cap ETF (GERJ): German unemployment change to be released on Tuesday could lead to increased trading volume of GERJ. Worries over Europe continue and analyst forecast unemployment change to decline to -5,000.
• Canada Small Cap ETF (CNDA): Canadian GDP data will be released Wednesday morning before market open. CNDA will likely see a gap Wednesday as investors get a better idea of the country’s overall economy.
• CurrencyShares Swiss Franc Trust (FXF): Analysts are expecting a decline in Switzerland’s GDP down to 1.8% from the previously reported 2.3%. FXF may see higher trading volume as investors readjust their view on Swiss franc.
• Dow Jones Industrial Average ETF (DIA): The U.S. manufacturing data is expected to be released on Thursday and analysts are expecting the figure to increase 51.5 from 50.8. DIA will likely increase in trading volume as this data generally tends to be a big market mover.
• DB USD Index Bullish ETF (UUP): The U.S. unemployment rate to be released Friday morning is expected to remain the same at 9.0%. Investors might see some volatility in UUP as they gain a better idea on whether or not the recovery in the labor market is still causing a drag on overall economic output.

Investors will look to the U.S. retailers for a strong start to the holiday shopping season in hopes of restoring some confidence back in the markets. Deficit reduction planning and budget negotiations at home coupled with ongoing European debt woes will likely make for a volatile trading week yet again. Below, we have highlighted some technical trading ideas for the upcoming week. Note that most of these recommendations require active management as they are only relevant for a very short period of time. As always, investors of all experience levels are advised to use stop-loss orders and practice disciplined profit taking techniques.

Actionable ETF Idea #1: Long XLV