Light Volume Rally Continues: Dave's Daily
LIGHT VOLUME RALLY CONTINUES
You can't have everything I suppose but higher volume would demonstrate more conviction I would think. Nevertheless markets did rally some more due to an absence of sellers than anything else. Sure, Consumer Sentiment was better than expected with much of that due to higher stock prices as a factor. Also, the balance of trade was better and GE raised its dividend leading industrials higher.
The Fed will buy back $105 billion in Treasury bonds with the next round being between now and January 11
th
according to the
just released. There was no operation today but there will be two on the December 21
st
just in time for the holiday break. Given market action and predictions for economic growth ahead you must wonder why the Fed is doing this.
Volume was pathetically light and you'd think we're already in the holiday period although Hanukkah observances ended yesterday. Breadth was positive.
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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
I wouldn't say there was a lack of interest in markets as much as investors seem confused. Hell, I'm confused. If markets are suggesting (Small Cap rally and Bond market collapse) that the economy is in the process of a growth spurt then why do we continue POMO? Is Bernanke stubborn or sees thing the other way? If it's the former then bonds and stocks should reverse course quickly. If it's the latter then he'll have to change course in the "15 minutes" he said it would take.
Here's the deal with us, we're trend-followers and perhaps trend-followers with an attitude. As such we stick with market trends and not fight them. So we're long overall even while holding our noses.
Next week will offer much in the way of economic data linked
.
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, IWM, TNA, QQQQ, QLD, XLI, XLF, FAS, TBF, GLD, DGP, SLV, JJC, XME, BAL, DBC, DBA, EFA, EEM, EWA, EWJ, EWG, EWU, 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
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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
, 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.