External Pressures Dampen Coal ETF

To be blunt, the Market Vectors Coal ETF KOL is a high-beta ETF that is plenty of fun to be involved with in overtly bull markets, but an ETF worth avoiding in lethargic settings. By most appearances, China's demand for coal remains strong. Peabody Energy BTU, the largest U.S. coal producer and KOL's third-largest holding, is desperate to bolster its presence in Australia via acquisitions to meet rising coal demand in China. Today, mining equipment maker Joy Global JOYG reported better than expected earnings and that its efforts to invest more in meeting Chinese demand for coal are paying dividends. Joy Global, KOL seventh-largest holding, said, steel production in China remained strong through April and is on track to jump 8 to 10 percent this year, according to the AP. The company raised its full-year guidance to $3.85 and $4 per share on revenue of $3.3 billion to $3.4 billion from $2.85 to $3.05 per share on revenue of $2.8 billion to $3 billion. That has shares of Joy Global trading higher, but KOL is languishing today, down more than 1% as of this writing. China's efforts to cool economic growth and the European debt crisis continue to punish KOL and while support looks kind of firm at $30, being involved with KOL for anything more than a swing trade is a tough bet to endorse at this juncture.