End of Month Window-Dressing: Dave's Daily

GDP data was worse than expected but bulls bought the lower gap open and ran with a better Chicago PMI and stable U of Michigan gauge of Consumer Sentiment. Markets overall closed little changed after being down nearly 150 points. Let's remember, it's the end of month window-dressing time and stocks "must rise". Twelve consecutive weeks of stock mutual fund redemptions per ICI and even State Street reporting equity outflows from ETFs shows us who's in charge here--trading desks, HFTs and a smattering of hedge funds.

Of perhaps great significance are ongoing low interest rates making the alternative to stock buying unacceptable. So, the punchbowl remains spiked for traders.

On the other hand, the 10-year U.S. bond yield at 2.90% is a sign of recession not strong growth. This is the scarier interpretation.

Let's not be naïve; July 30^th was pure manipulation. There's no denying the tape that's for sure. But most charts still show markets churning along in trading ranges despite a great July which followed a crummy June.

Real market movers this week have been commodity markets with grains, base metals, gold and some energy sectors leading the way. Much of this is weak dollar related while it could also mean sign of future growth.

In the meantime, Friday volume remained light while breadth was slightly positive.

SPY: There is little to add to a rather dull finish to the managed month of July. We're still in a range and despite the excellent month of July it was once again achieved with little volume.

MDY & IWM: I'm sorry to report the condition is "trading range monotony".

 

QQQQ & XLK: A tale of two tech sectors, one with a 20% weight in Apple, the other with half that. XLK may better reflect the overall condition of tech this week.

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