Investors in Wonderland: Dave's Daily

At the cost of repeating myself: "Bad news is good, good news is better" rules.
By Dave Fry ,

It does make you feel like you're communicating with the Cheshire Cat sometimes; but, at the cost of repeating myself: "Bad news is good, good news is better" rules.

So the employment report was a stinker so if you ask the cat he'll tell you this is good news since it yields more

POMO

(another round today) and will cause congress to keep current tax policies intact. Do you really need to know anything else Alice?

Volume was quite light and breadth remains positive.

Continue to U.S. Sectors, Stocks & Bonds

Continue to Currency & Commodity Markets

Continue to Overseas Markets & ETFs

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

Markets are breaking out higher. Logic can often be perverse but the meme, "bad news is good, and good news is better" is dominant. Besides it's the best month of the year for a rally and bonuses are on the line for many portfolio managers.

It would be hard to make all this up but the Cheshire Cat can explain it maybe or you might grab a mushroom and

Ask Alice

I think she knows. We can put logic aside until January.

Enjoy your weekend!

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Disclaimer: Among other issues the ETF Digest maintains positions in: SPY, MDY, IWM, TNA, QQQQ, XLI, XLB, UYM, TBF, GLD, DGP, SLV, 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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