Watch List Update
I though it would be good to start the week and month with an update of my Watch List. This is a list of ETFs currently covering housing, gold, energy and emerging market stocks. The idea behind this list is to watch for trends in these sectors looking for entry or exit points to enhance the profitability of our stock holdings.
I am definitely not a technical analysis guy. My opinion of trading on technicals alone is that a technical trading program works until it stops working-usually without warning. That said, however, using some technical indicators can give us some additional insight on what is happening with a security or index. In regards to my watch list ETFs I looked at the three month price chart with the 50 day and 200 day moving averages. Again, I am not the person to talk to concerning the use of moving averages, I just use them here for added enlightenment.
(GLD: 121.86 0.00 0.00%) took a recent dip, reaching the low right at the 200 day MA of $64.76 on 8/16. The price has zigged higher since crossing the 50 day MA on 8/28 at $65.64. The 6 month price chart shows (to my eye) a trading range with out upward or downward direction, while the short term (2 weeks) is upward.
(XLE: 54.20 0.00 0.00%) has been trading flat between the (lower) 200 day MA and the 50 day MA. It dropped below the 50 day for good about 5 weeks ago, and sits right at the 50 day MA now. The upward momentum of the last several years seems to have stalled. Eyes will stay focused to see if the next move is up or down.
(ITB: 11.81 0.00 0.00%) is still trending down with no relief in sight for the housing stocks. I expect the stock prices to be a leading indicator of an overall housing recovery so the current direction of this ETF give no good will.
(EEM: 42.03 0.00 0.00%) took a pretty good pullback from its high in July falling about 20%. The low of the retreat stopped at the 200 day MA of 120 on 8/16 and the price has rebounded to cross the higher 50 day MA of $132.65 last Thursday (8/30). It appears with my 20/20 rear view mirror the recent pullback was a buying opportunity, which I, for one failed to exploit.
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