Bulls Charge On With Blinders: Dave's Daily

More POMO, better retail sales reports and pending home sales data allow bulls to build on yesterday's rally.
By Dave Fry ,

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POMO

($8.3 billion), better Retail Sales reports and Pending Home Sales data (+10.4%) allow bulls to build on yesterday's rally. Any worries from Europe, China tightening, higher Jobless Claims are mere inconveniences when the light is a bright green.

Let's face it. This is what the Fed stated they wanted with their POMO activities -- higher prices overall with higher stock prices emphasized. The Fed prints money and buys bonds from the Primary Dealers and (wink, wink) they know what they're supposed to do with it. Bears just better get out of the way.

Friday presents the unemployment report which should be a nonevent if numbers are bad -- remember, and keep repeating this mantra as you try to reason with events: "bad news is good, good news is better."  That should do the trick.

Volume wasn't impressive but breadth was again quite positive.

 Continue to U.S. Sectors, Stocks & Bonds

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The

NYMO

is a market breadth indicator that is based on the difference between the number of advancing and declining issues on the NYSE. When readings are +60/-60 markets are extended short-term.

The

McClellan Summation Index

is a long-term version of the McClellan Oscillator. It is a market breadth indicator, and interpretation is similar to that of the McClellan Oscillator, except that it is more suited to major trends. I believe readings of +1000/-1000 reveal markets as much extended.

The

VIX

is a widely used measure of market risk and is often referred to as the "investor fear gauge". Our own interpretation is highlighted in the chart above. The VIX measures the level of put option activity over a 30-day period. Greater buying of put options (protection) causes the index to rise.

Continue to Concluding Remarks

Friday is the unemployment report which shouldn't offer much resistance to bulls given that "bad news is good and good news is better" mentality in place. Also featured are Factory Orders and ISM Services data.

At this point, "don't fight the Fed" is front and center. 

Let's see what happens. You can follow our pithy comments on

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Disclaimer: Among other issues the ETF Digest maintains positions in: SPY, MDY, QQQQ, XLI, TBF, GLD, DBC, DBA, EFA, EEM, EWA, EWJ, EWY, EWC, EWZ, RSX, EPI & FXI.

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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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Dave Fry is founder and publisher of

ETF Digest

, Dave's Daily blog and the best-selling book author of

Create Your Own ETF Hedge Fund, A DIY Strategy for Private Wealth Management

, published by Wiley Finance in 2008. A detailed bio is here:

Dave Fry.

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