Five ETFs for Short-Sellers

Reports of rising consumer prices, lower consumer confidence and stagnant industrial production temporarily stalled last week's rebound in the Dow Jones Industrial Average.

This market barometer failed to move beyond the record intraday high of 13,692.00 set on June 1. If the market cannot break through this resistance, then the Dow's next move might be to test the recent low of 13,251.53 set on June 8.

Below are the five weakest exchange-traded funds that meet our standards to be considered technically bearish. This means that the five-day moving average is below the 10-day moving average, and that the moving average convergence-divergence indicator has given a fresh "sell" signal within the last 10 days.

With fixed-rate mortgages climbing, Tuesday's report of falling housing starts in May is bad news for anyone envisioning the end of the real-estate recession anytime soon.

Still on the list from earlier this month is the SPDR S&P Homebuilders ETF (XHB Quote). The fund has dropped from the closing price of $34.25 on June 6 to Tuesday's close of $32.70, but it has more room to fall. At last reading, 71.1% of the fund is composed of homebuilders grudgingly lowering prices to sell their properties.

The 100% pure play in homebuilding, iShares Dow Jones US Home Construction Index Fund (ITB Quote), joined its SPDR cousin on the list of technically weak ETFs. Returns on these two homebuilder funds are 97% correlated over the last year, so shorting both is not a good plan.