Progress In Greece Will Tip Markets

by on February 20, 2012 | ETFs Mentioned:

Markets broadly climbed higher last week amidst ongoing uncertainty stemming from the Euro zone, although this week should offer investors more concrete insights on just how the Greek bailout negotiations are moving along. Wall Street is taking the day off today in observance of Presidents Day. With no major economic data releases due out this week on the home front, investors are sure to keep their eyes and ears fixed on developments in the currency bloc overseas. 

Weekly Outlook

The coming week will be fairly light on central bank meetings, although several important housing market data releases will steal the spotlight on the home front. Below, we highlight ETFs that may see an increase in trading activity as relevant market data is released and evaluated by investors:

  • iShares MSCI New Zealand Investable Market Index Fund (ENZL): This ETF could gap on Tuesday morning following the release of the latest Reserve Bank of New Zealand inflation expectations report the night before. Analysts are expecting for inflation expectations to remain unchanged, with the previous reading coming in at 2.8%.
  • Rydex CurrencyShares British Pound Sterling Trust (FXB): The British pound may experience volatile trading after the latest Bank of England minutes are released early Wednesday morning. Investors will look for insights on the U.K economy has been holding up amidst the ongoing Greek debt drama. 
  • State Street SPDR Homebuilders ETF (XHB): U.S. existing home sales data is slated to come out on Wednesday morning after the opening bell, bringing the spotlight onto the ultra-popular XHB. This ETF may experience volatile trading depending on the results; analysts are expecting for existing home sales to come in at 4.7 million, versus last month’s reading of 4.61 million.
  • Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX): Volatility could strike on Thursday as investors digest the most recent jobless claims data. Analysts are expecting for 353,000 to have filed for unemployment benefits, versus the 348,000 last month. 
  • iShares MSCI Germany Index Fund (EWG): This ETF could experience an increase in trading volumes on Friday as investors react to the latest German GDP data. Analysts are expecting for the economic powerhouse to post growth of 2%. 
  • State Street SPDR S&P Retail ETF (XRT): Domestic retail stock will be under the spotlight on the final trading day of the week following the latest consumer sentiment data. Analysts are expecting for the figure to come in at 73, versus last month’s reading of 72.5

The Euro zone continues to be the center of attention, and drama, as lawmakers are hammering out the details and requirements for Greece’s second bailout. U.S. data releases have been overwhelmingly positive in 2012 so far, and the trend is expected to continue as long as resurfacing debt-drama doesn’t derail the bull train on Wall Street. Below, we have highlighted three 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 CORN

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Disclosure: No positions at time of writing.