The energy and commodities sectors have dropped significantly below their 200-day moving averages and are now in sell territory, says Tom Lydon, editor of ETF Trends and president of Global Trends Investment.
Lydons system of technical analysis, which tries to target gains before a winning fund falls too far (typically 8%), isnt offering much to buy currently. He has put sell suggestions on certain ETFs that are even still trading above their 200-day moving averages, such as United States Oil and Energy Select Sector SPDR, according to MarketWatch.
In addition, Lydon recommended that all China-related ETFs, like Halter USX China, are current sells and other investments, such as Market Vectors Russia, iShares MSCI Brazil, and Rydex S&P500 Pure Value fund, are also sells.
His system typically works best on larger funds, but he offers suggestions on smaller funds, like Health Shares Cancer fund, to sell and for investors to look at alternatives like the iShares Biotechnology fund.