ETF Outlook for the Week of July 7, 2014

ETF Outlook for the Week of July 7, 2014

The Dow Jones Industrial Average closed above 17,000 for the first time ever last week before heading into the holiday weekend. The close above the round number may have created a few headlines for investors to discuss over the holiday, however in reality it does not mean much in the way of the charts. The S&P 500 is standing at 1985, within one percent of breaching the 2000 level. Investors should be prepared for more headlines when the index is able to breakout above the psychological number.

Below are a few ETFs that may be on the move.

SPDR S&P Retail ETF XRT

The retail stocks had a strong week and closed within one percent of a new all-time high. In a holiday-shortened week the ETF gained 2.4 percent as the overall market pulled many sectors higher. The better than expected jobs number on Friday was a big boost to the consumer and retail stocks as more people are employed it suggests more money will be put back into the economy. From the chart perspective, the ETF has run into resistance at the $89 area several times since late last year, only to fail and sell off for a few weeks. This week will be very important for the ETF that closed out last week at $88.65.

Global X China Consumer ETF CHIQ

Retail auto sales in China rose by 14 percent in June to a total of 1.47 million units. Sales during the first six months of 2014 are up 11 percent over last year at the same time. Chinese auto manufacturers make up about 14 percent of the ETF and several of the top holdings are auto companies. The ETF closed at the best level in over two months last week and as the middle class continues to grow in China this niche ETF could be a big winner.

iShares MSCI All Peru Capped Index ETF EPU

A big four-day rally for EPU resulted in the ETF breaking out of a yearlong consolidation phase. A large portion of the move has to do with the materials sector and more specifically the copper stocks. The ETF’s second largest holding, Southern Copper SCCO, closed with a gain of 10 percent last week to hit a new 52-week high. EPU had some major issues in 2013, but if the charts are telling the correct story it appears they may be in the rearview mirror.