Dave's Daily: Oversold Rally

Markets and ETF expert Dave Fry said stocks were due for a bounce given oversold conditions he flagged last week. This edition of Dave's Daily also looks at Alcoa, Cisco, Wal-Mart and ETFs like QQQQ, MDY and GLD.
By Dave Fry ,

Dave's Daily

By Dave Fry, founder and publisher of

ETF Digest

and author of the best-selling book

Create Your Own ETF Hedge Fund.

February 1, 2010

OVERSOLD RALLY

As suggested, stocks were due for a bounce given oversold conditions pointed-out here last week.  The sectors most oversold, materials and commodities, rallied most.  Monday was a classic short-squeeze under those conditions.

The news sparking this reversal was primarily manufacturing data which was better than expected. 

Volume as about average but breadth was quite positive.  NASDAQ breadth in share volume was most impressive meaning bigger stocks saw most of the buying as per the WSJ.

Continue to Major US Markets

Continue to US Sectors & Bonds

Continue to Currency & Commodity Markets

Continue to Overseas Markets

Continue to Concluding Remarks

Monday was the kind of bounce a number of indicators have been promising, especially the NYMO.  Now the severe nature of that condition is relieved and we'll see if bulls can add to it throughout the week.  There's a lot not to like now as the Fed is running out of bullets on its balance sheet.  The deficit is staggering in its size.  The government is too big and it seems reducing it is impossible from a political view.  But it must be done.  Until then, traders will trade because they must.

There's also some trouble brewing in and with Iran as Ahmadinejad makes threats and the US Navy steams toward the Gulf. 

Tuesday is Groundhog's Day which means I get to watch one of my favorite movies...again.  Other than that there are lots more economic data on the way with most beginning on Wednesday and ending with the employment report on Friday.

Let's see what happens and you can follow our pithy comments on

twitter

.

Disclaimer:  Among other issues the ETF Digest maintains positions in: not much.

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

.

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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