One investment newsletter that trades ETFs on Friday said the move lower in the S&P 500 the previous session triggered the closure of a number of long positions.
“The breakdown attempt has reversed today but in light of recent moves it could just be another trap. The index has been volatile for the past few weeks, with head fakes in either direction,” said Tarquin Coe, technical analyst at Investors Intelligence.
“We shall not chase today’s bounce and will trade defensively for the time being. The market is oversold but often the most violent washouts occur under such circumstances,” he added.
The analyst suggested an equity income-oriented ETF, iShares Dow Jones Select Dividend (NYSEArca: DVY), as a defensive option to consider.
SPDR S&P 500 ETF
