Retail, China And Gold ETFs To Watch This Week

Markets are coiled in a tight sideways trading range after several weeks of consolidation. While the uptrend remains intact, prices could experience some additional volatility during the historically weak month of September.

Here are the key ETFs to watch for the week of Monday, September 8, 2014:

SPDR S&P Retail ETF (XRT)

This coming Friday marks the release of August retail sales statistics and the consensus is focused on a 0.6 percent gain versus a flat July reading. The data could have a great deal of impact on XRT, which tracks 100 equal weighted consumer retail stocks.

Standout holdings in XRT include J.C. Penney Company Inc(NYSE: JCP) and American Eagle Outfitters (NYSE: AEO). In 2014, XRT has gained just 1.69 percent amid heightened volatility and uncertain price action of its constituents. However, a better than expected retail sales number would likely boost confidence in this ETF as holiday shopping season comes closer.

iShares China Large Cap ETF (FXI)

China has been a significant area of strength over the last several months and recent economic data has continued to support a reflation trade in this country. FXI tracks 25 of the largest stocks in China and will soon be expanding to 50 total holdings in the next several weeks. This ETF is now trading at its highest level in months and will be a key indicator of emerging market momentum. China is set to release a number of important economic statistics this week that include inflation rates, retail sales, and industrial production. The reaction to these data points will likely impact FXI over the next five trading sessions.

Related Link: ETFs to Play an Apple Inc. Rebound

SPDR Gold Shares ETF (GLD)

Precious metals, lastly, have endured a difficult summer amid a strengthening U.S. dollar index, which has led to further selling in gold and silver. GLD tracks the daily change in the spot price of gold bullion and will face a key test of support in the coming week. GLD must hold above $120 to avoid breaking its June low, which could lead to more technical damage in the near term. This will certainly be one commodity that traders will be watching closely and holding this line may shift the momentum back to the bulls.

Disclosure: At the time of this writing, David Fabian had no position in the equities mentioned in this report.