ETF Outlook for October 9, 2013

Here are some notable ETFs worth taking a look at for Wednesday, October 9, 2013.

SPDR Gold ETF GLD

President Obama is expected to nominate Janet Yellen as the next chairman of the Federal Reserve today. Most experts believe Yellen will keep with Bernanke’s strategy of quantitative easing and that the easy money policy will continue seamlessly. This should be viewed as a positive for gold because this type of strategy will eventually lead to inflation. However, gold is down 1 percent this morning. It bears to watch GLD in the next few days to see how it reacts to the Yellen nomination and the continuing government shutdown. As long as GLD stays below $130/share the ETF remains in a very bearish pattern.

SPDR S&P Retail ETF XRT

Two big-name retailers, Costco COST and Family Dollar FDO, reported disappointing earnings this morning and are selling off in pre-market action. Both stocks are in the XRT, which fell 1.9 percent yesterday to its lowest level in a month. The government shutdown appears to have a direct link to consumer confidence, which is troublesome for the retailers and spending habits. XRT should find support near the $77 area.

SPDR International Treasury Bond ETF BWX

Spain and Italy are making big moves in the bond markets this week by offering new paper. Italy will be issuing a 7-year bond for the first time ever and Spain will be issuing its first 30-year bond in four years. Spain offered a 10-year note last year that yielded 7.3 percent and today analysts expect the 30-year bond to go off around 5.1 percent. The major difference shows the improvement (or at least perceived improvement) in the financial state of the country. BWX holds both Spanish and Italian bonds along with the U.K. and Japan as its top countries. The ETF is trading just below a multi-month high and currently yields 1.8 percent.

SPDR S&P 500 ETF SPY

The ETF that tracks the S&P 500 index took a big hit yesterday, falling 1.16 percent to close at a new one month low. The heavy volume day has the ETF well below its 50-day moving average and below price support. The next level of support is the August low at $163/share. If the ETF were to fall to the next support level it would need to fall another 1.5 percent from yesterday’s closing price. An early morning bounce will likely greet investors today, but that the only number that matters is where the ETF closes. The first level of resistance will be $167/share.