ETF Outlook for Thursday October 31, 2013
Global X Social Media ETF (NYSE:SOCL) & Renaissance IPO ETF (NYSE: IPO)
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The number one holding in both ETFs is social media darling, Facebook (NYSE:FB). The stock shot 15 percent higher yesterday after the closing bell rang on better than expected revenue and earnings.
Facebook hit a new all-time high before giving back all its gains as the conference call highlighted some disturbing trends. The company saw a decline in teen daily active users and there have been rumblings that FB may not be the cool site it once was. Either way the stock decides to react this morning, expect the two ETFs to move in accordance throughout the trading session.
Guggenheim Solar ETF (NYSE:TAN) & Market Vectors Solar Energy ETF (NYSE:KWT)
One of the larger holdings in the two solar energy ETFs, SunPower Corp (NASDAQ:SPWR), reported earnings after the bell last night and the stock is falling and dragging down the sector. The run in the solar stocks and in particular SPWR has been eye-popping this year.
SPWR is up 466 percent heading into today and it would not be a big surprise to see the stock fall on the news as investors take profit. The selling will likely spread to the other big names and look for TAN and KWT to be on the defensive today.
SPDR High Yield Bond ETF (NYSE:JNK)
The Fed announcement yesterday sent bond yields higher as the price of bonds fell. JNK closed with a small loss of 0.20 percent, however it continues to fail at a significant resistance level at $40.84.
The ETF came with a few pennies yesterday before closing the session at $40.65. Add the failure to breakout to the overbought level on the chart and it appears JNK could be setting up for some lower prices in the week ahead.
Global X Gold Explorers ETF (NYSE:GLDX)
The buy on the rumor, sell on the news strategy appears to be in full affect when it comes to the gold mining stocks. GLDX rallied 26 percent in less than two weeks before hitting resistance at the 50-day moving average and closing lower the last two days. With the Fed set to continue pushing back the taper it should be good for gold and the miners.
However, the 26 percent rally appears to have priced in the Fed announcement Thursday and lower prices could be in the cards for GLDX.
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