2 Additional ETF Trends Flash Yellow Warning Signs
Pacific Park Financial Inc. | Feb 28, 2013 02:15AM ET
Yellow lights may not signal that a driver should slam on the brakes. On the other hand, anyone who has ever pushed the pedal to the floor to make it through an intersection has been burned by a speeding ticket - or three.
Similarly, when warning signs appear, investors should not abandon every exchange-traded asset in their vehicle. Yet ignoring significant impediments to sustainable price appreciation is likely to cause emotional stress at best and undesirable financial hardship at worst.
A week ago, I gave readers and listeners 3 ETFs for trends are what make or break bull markets . For example, if China’s economic growth trends from 10% to 9% to 7.5%, its stock market fears the direction of the trend more than it is capable of embracing an absolute GDP number. Similarly, if the U.S. experiences genuine improvement in the jobs picture in 2013, the U.S. stock market may struggle with the possibility of a trend shift from loose monetary policy to tighter monetary policy.
So essentially, we are more interested in rising Italian bond yields (falling government bond prices) than the absolute price/yield. If PowerShares DB Italian Treasury Bond ETN (ITLY) continues to deteriorate further and further below key moving averages, you are likely to see volatile price swings in stocks — both domestic and abroad.
Disclosure
: Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. Gary Gordon, Pacific Park Financial, Inc, and/or its clients may hold positions in the ETFs, mutual funds, and/or any investment asset mentioned above. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial, Inc. or its subsidiaries for advertising at the ETF Expert web site. ETF Expert content is created independently of any advertising relationships.
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