Exchange traded funds tracking the S&P 500 are down more than 2% this week as the stock ETFs try to hold the 50-day moving average.
“The S&P 500 slid beneath its 50-day exponential moving average yesterday and also retraced 50% of the rally off the June lows. The sideways stagger of recent months continues,” wrote Tarquin Coe at Investors Intelligence in a newsletter Friday. “A visit back down to the June lows would be highly probable should major indexes end today in the red.”
SPDR S&P 500 ETF (NYSEArca: SPY) was struggling to stay in the green late Friday. Energy Select Sector SPDR Fund (NYSEArca: XLE) was up more than 2%, however, on higher oil prices and $12.1 billion all-cash bid for Petrohawk Energy (NYSE: HK) from BHP Billiton (NYSE: BHP). [Energy ETFs Jump]
Elsewhere in sector ETFs, Financial Select Sector SPDR Fund (NYSEArca: XLF) was down nearly 1% due to a late-day slide in Citigroup (NYSE: C) and Bank of America (NYSE: BAC) following Citi’s earnings report.
The S&P 500 “is struggling to gain traction” and resolution will only come “once macro uncertainties such as the U.S. debt ceiling and Euro region debt begin to lift,” Coe said.
However, the technical analyst is bullish on precious metals. [Gold ETFs See Large Inflows in Second Quarter: Report]
PowerShares DB Precious Metals (NYSEArca: DBP) has “reasserted its near perfect uptrend” while the fund “feeds on uncertainty.”
On a log chart, “the angle of the trajectory is close to 45 degrees — healthy and not indicative of a speculative bubble,” Coe wrote.
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.