Strong Retail Data And Wal-Mart Downgrade Could Fuel Volatility In This ETF

ETF Outlook for Tuesday, July 29, 2014

Stocks entered the week on a sour note. Last Friday, as investors digested economic, geopolitical and earnings news, many decided it was time to sell and pushed the Dow down more than 100 points.

Then the buyers came back Monday, just as they have been in the last few months. By the time the opening bell rang the index was up 22 points. Technically the stock held above its 50-day moving average as well as its current uptrend line, suggesting all is good in the land of the bulls.

SPDR S&P Retail ETF (NYSE:XRT)

Conflicting factors are pushing on retail.

This morning the Redbook chain store sales came in, showing increases of 4.6 percent over last year and 2.8 percent over last week. The move could have been sparked by early back to school shopping. Also moving the retail sector will be a downgrade of Wal-Mart (NYSE:WMT). Premarket, the stock was down about 0.7 percent, but as of 10:15 a.m. it was up 0.14 percent.

XRT has been struggling as of late, now down five percent from the early July high, which was a few pennies from an all-time high. The failure to breakout earlier this month was negative on the charts, but as long as XRT can continue to hold the $83.50 area it could be setting up for a rally back to the high near $89.00.

iShares MSCI Emerging Markets Index ETF (NYSE:EEM)

Another strong day for the emerging markets, led by a big really in Chinese stocks. EEM closed the session up 0.7 percent to its best level in over a year and is within a half percent of another breakout. A close above $45.33 would put EEM at its best level since 2011, and that could create some buzz around the asset class.