End of Month Window-Dressing: Dave's Daily

There's always confusion for investors. It may be markets just needed to digest the previous week's large gains and so we drifted. Fund managers, despite redemptions, want to protect their new found positions so they buy dips. Dip buying has been ubiquitous over the past year given ultra-low interest rates and the poor competitive alternatives those offer. Perma-bulls know they always need to buy and will rationalize it (spin-it) to suit their goals.

The message from bond markets is one of recession and not growth. For bulls, this means an extended period of low interest rates justifies stock buying--"don't fight the fed" and etc. Additionally, there's a yield buying panic in bond markets and high yield sectors.

The message from economic data is also recession or the more polite "double-dip" term.

The message from earnings is many companies are doing well while Main Street isn't.

I'm just a technician or, a technician with an attitude. If we must invest, we will.

August will start with the remnants of earnings reports, the import ISM report on Monday and the all-important unemployment report on Friday. It should be interesting as usual.

Let's see what happens. You can follow our pithy comments on twitter and become a fan of ETF Digest on facebook.

 

Disclaimer: Among other issues the ETF Digest maintains positions in: GLD, UDN and ULE.

 

The charts and comments are only the author's view of market activity and aren't recommendations to buy or sell any security.  Market sectors and related ETFs are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period.  Chart annotations aren't predictive of any future market action rather they only demonstrate the author's opinion as to a range of possibilities going forward. More detailed information, including actionable alerts, are available to subscribers at www.etfdigest.com.

 

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