5 ETFs to Watch This Week

NEW YORK ( TheStreet) -- Here are five ETFs to watch this week.


The bull market turned three at the end of last week, celebrating with another encouraging jobs report. This promising news made for an optimistic end to a choppy week of trading.

In the opening months of 2012, we have seen some solid signs of improvement. However, it is clear that hurdles remain. If the marketplace can follow up Friday's jobs number with some strength, a return to the highs for the year could be in the cards. Even in periods of optimism, however, it is important to maintain a level of protection. It is unclear when the next market-moving headwind will surface.

iShares Dow Jones U.S. Real Estate Index Fund ( IYR)

REIT-backed products like IYR continue to be my funds of choice when it comes to targeting the U.S. real estate industry. Homebuilders saw some strength during the latter half of last week, but oversupply issues will likely ensure that this corner of the housing sector remains choppy.

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Despite my preference, however, IYR has struggled to pick a direction in recent weeks. Since late February, the fund has traded sideways. As it approaches its 50-day moving average, it will be interesting to see where it heads next.

iPath Dow Jones UBS Natural Gas Subindex Total Return ETN ( GAZ)

The premium underlying the GAZ is still hovering around 100% as investors continue to make an effort to position themselves for a potential natural gas turnaround. The wild interest in this disconnected ETN comes even as fellow futures-tracker, the United States Natural Gas Fund ( UNG) slides to all-time lows. UNG currently boasts no premium.

Continue to avoid the broken GAZ. As long as this premium persists, the fund is susceptible to wild swings in both directions.

iShares MSCI EMU Index Fund ( EZU)

Ghosts of 2011 cropped up early last week as the EU's debt woes and China growth doubts dominated headlines.

The past few days were particularly exciting for Greece as it once again struggled to avert crisis. Worries flared, but by Friday, some tension had lifted. Reportedly, the troubled nation was successful in organizing a massive debt-swap deal. This exchange was one of the requirements needed to secure its second bailout package.

Europe is not out of the woods yet, but this news is encouraging. Next week we will uncover additional clues as to the state of the euro union when the EMU industrial production report is released.

SPDR S&P Retail ETF ( XRT)

Economic indicators continue to indicate improvement, but one area of question remains the U.S. consumer. Data points including consumer confidence and consumer credit point to healing. However, with rising fuel prices still in focus, some wonder whether domestic shoppers will remain the beacons of strength they have been throughout the economic recovery.

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On Tuesday, retail sales data for February will be released. A strong showing will likely propel XRT higher. Despite the cautious attitude towards consumers, this fund has been on a tear, pushing to all-time highs.


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Written by Don Dion in Williamstown, Mass.
At the time of publication, Dion Money Management owned the iShares Dow Jones U.S. Real Estate Index Fund.

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