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Five ETFs to Watch This Week

Don DionPortfolio Manager

NEW YORK (TheStreet) -- Here are five ETFs to watch this week.
iPath S&P 500 VIX Short Term Futures ETN
The U.S. market has continued its slow climb, helped higher by improving economic conditions here at home. At the same time, however, continued concerns regarding the state of regions like Europe are keeping optimism from flourishing. As these two driving forces have battled for investor attention, the battered volatility index has seen some inkling of life. For the first time in 2012, the VIX has returned to its 50-day moving average.
It's common to see volatility increase during shortened trading weeks. The VIX and VIX-tracking products like VXX could be interesting to watch, but long-term investors should stick to the sidelines.
iShares Dow Jones Transportation Average Index Fund
The jobs picture is improving, corporate conditions are solidifying, and inflation pressures remain subdued. All of these factors make for an encouraging economic landscape. However, one notable smudge is the laggard performance seen from the transportation industry.
Dow theorists, who have watched the Dow Jones Industrial Average power through its April 2011 highs, are likely keeping a close watch on the performance of IYT and the Dow Transports Index. According to this school of thought, in order to confirm an upward market trend, this industry would have to follow suit.
So far, however, the showing has been disappointing. Rather than pushing higher with the Industrials, IYT has stumbled to levels not seen since mid-January. Investor confidence will likely see a boost in the event that this fund can turn itself around in the coming days.
United States Oil Fund
Friday's CPI report noted that inflation pressures remained relatively contained in January compared to prior months. Investors who have filled their gas tanks recently, however, would differ.
Energy prices have begun to fall back into focus over the course of the month as crude oil prices have powered back through the $100 level. In response, the futures-backed USO has recovered back to levels seen at the start of 2012. Bloomberg notes that natural gas has offset this increase as this slice of the energy pie continues to face heavy pressure thanks to oversupply.
As oil marches higher, some market commentators and analysts have begun to express concerns that soaring fuel prices could cripple the economy's recovery. Keep an eye on this variable.
PowerShares QQQ
Apple was the talk of the town last week as the firm's stock price hovered around the iconic $500 level. In addition to its price fluctuations, the firm also stole headlines with reports that it had regained its throne as smartphone king and unveiled the newest update for Mac OS: Mountain Lion. Rumors of a potential dividend have also helped to ensure that the Cupertino-based firm remains in the spotlight.
Accounting for over 15% of QQQ's total portfolio, it is far and away its largest holding. In the days ahead, keep an eye on this company. As goes Apple, so goes the Q's.
Earnings season will ceremoniously come to a close this morning when Wal-Mart steps up to the plate. The discount giant is just one of the retail names slated to present its quarterly performance numbers: Macy's , Target , Gap , Dollar Tree and Limited Brands are also on the docket this week.
Investors looking for a wide net approach to the retail sector should keep an eye on XRT.
Written by Don Dion in Williamstown, Mass.