The Uptrend Remains For Now

by on April 2, 2012 | ETFs Mentioned:

Equity indexes on Wall Street oscillated between gains and losses throughout the majority of the trading week as slightly disappointing economic data releases were enough to encourage broad-based profit taking. Investors were displeased with a slow down in durable goods orders, although better-than-expected consumer sentiment on Friday helped to restore confidence. This week will see a host of important economic news on the home front which could potentially tip the markets lower if a correction develops, although the bulls will surely look to retain their dominance on Wall Street.

Weekly Outlook

Below, we highlight ETFs that may see an increase in trading activity as relevant market data is released and evaluated by investors:

  • SPDR Gold Trust (GLD): Gold prices may have a volatile trading session on Tuesday as the latest FOMC minutes are released. Any hints of further quantitative easing could spark inflation fears and send GLD higher.
  • First Trust NASDAQ Global Auto Index Fund (CARZ): This sector-specific ETF could see an increase in trading volumes on Tuesday depending on how investors react to the latest vehicle sales report. Analysts are expecting for March light-vehicle sales to come in at 14.6 million versus the previous reading of 15.1 million.
  • CurrencyShares Euro Currency Trust (FXE): The euro may experience volatile trading in the currency market following the latest European Central Bank rate decision on Wednesday morning. Analysts are expecting for the interest rate to remain unchanged at 1%, although commentary after the decision itself could spark a trading frenzy.
  • MSCI Canada Index Fund (EWC): Canadian equities could be in for a busy trading day on Thursday following the latest employment report for the country. Analysts are expecting for the local unemployment rate to remain unchanged at 7.4%.
  • iShares Russell 3000 Fund (IWV): The U.S. small cap segment could see an increase in trading volumes on Friday as investors react to the latest employment report on Wall Street. Analysts are expecting for the rate to remain unchanged at 8.3%.

Stocks finally pulled back last week, although the string of less-than-stellar data reports have led some to believe that a larger market correction could take place in the foreseeable future as the fundamental reality of the economic recovery sinks in. 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 KOL

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Disclosure: No positions at time of writing.