Other potential catalysts for aerospace ETFs include include, renewed airline pricing power evidenced by higher ticket prices, and more fees paid per traveler, increased airline profitability, new aircraft program launches and continued demand for aircraft models and technology.

Pearlstein also “thinks that another big factor pressuring defense stocks has been the selling of industrials–if investors are unloading their holdings via exchange-traded funds (ETFs) and other baskets, that means that defense names are being sold too, even though worries about a cyclical peak should be a good environment for defense,’” according to Barron’s.

Traders looking for a more aggressive play on aerospace equities can consider the Direxion Daily Aerospace & Defense Bull 3X Shares (NYSEARCA: DFEN). DFEN, which debuted earlier this year, seeks to deliver triple the daily returns of the Dow Jones U.S. Select Aerospace & Defense Index.

For more information on the defense industry, visit our aerospace & defense category.