ETF Outlook for the week of December 2, 2013

ETF Outlook for the week of December 2, 2013

Global X FTSE Greece 20 ETF GREK

Ratings agency, Moody’s, sees a cyclical recovery in Greece’s economy and has upgraded the country’s rating by two notches to Caa3 from C. Moody’s expects the country’s GDP to fall by 0.5 percent in 2014 before moving back to growth mode in 2015 with a forecast for a gain of 1.0 percent in the economy.

GREK is up 26.6 percent this year and is trading just below a multi-year high. Based on valuations alone, GREK is a bargain even though it has a big gain this year. The move over the weekend could add to the gains on Monday.

iShares MSCI Israel Capped Market Index ETF EIS

Fitch reaffirmed Israel’s A rating and ups the outlook to positive, the reason for the upgrade is a falling deficit. The ratings agencies do not carry the same clout they had before the financial crises, but the move still may have an affect on the ETF Monday morning. In 2013, EIS is up 15 percent and is trading at a new two-year high.

Related: Wide Range of ETFs Hitting New Highs (EWN, NLR, EIS, ING, TEVA)

With 24 percent of the ETF being in one stock, Teva Pharmaceuticals TEVA, the ETF does not offer true diversification into the country. However, it is one of only two ETFs that focus on the country. The other ETF to watch is the Market Vectors Israel ETF ISRA.

iShares MSCI Thailand Investable Market Index ETF THD

The protests in Thailand escalated this weekend as there are now four people reported dead. Over the weekend protestors stormed the PBS station in the country and a government building.

Shares of Thai stocks have underperformed this year along with the entire Southeast Asia region. THD is down 11 percent this year and with the protests not appearing to be slowing anytime soon it could send the ETF further into negative territory.

Market Vectors Retail ETF RTH

Black Friday is in the books and Cyber Monday will kick off the week. These are two of the busiest shopping days of the year for the brick and mortar and online retailers. According to ShopperTrak, sales on Black Friday increased by 2.3 percent from last year. The number could have been hurt by a number of large retailers that were open on Thanksgiving day for the first time.

Related: Where is the Bottom for Gold Miners? (GDX, GDXJ, DUST, JDST)

The research firm believes sales for the entire holiday season will increase by 2.4 percent year-over-year, the slowest growth since 2009. Overall the numbers are basically inline with estimates and it could be enough to draw investors into the sector. Other retail ETFs to watch include the SPDR S&P Retail ETF XRT and PowerShares Retail ETF PMR.

SPDR S&P 500 ETF SPY

The ETF hit a new all-time high intraday on Friday before finishing the holiday-shortened trading session down 0.1 percent. The volume was low and the significance of the move on Friday is not really high. However, the chart of SPY shows an index that is slowing as it hits highs and could be setting up for a normal pullback.

The RSI indicator recently generated a crossover sell signal, which has a good track record for predicting short-term tops. A pullback to the 50-day moving average and price support at the $174.50 area could constitute a 3.5 percent pullback from Friday’s close of $181.00. Investors should be prepared for a pullback in the next couple of weeks and the level to watch is the moving average and support line.