Bull Reawakens on Thursday: Dave's Daily
The light volume rally continues even with unremarkable headlines. Jobless Claims data was unchanged and housing data via the FHFA House Price Index was just okay. After all the prior house price reading was revised lower from 1% to .7% making today's reading unchanged at .7%. Both were enough to energize bulls. Perhaps a more important story was that Apple (AAPL) may declare a dividend at the behest of its largest shareholders.
Meanwhile in Europe, the European Commission stated both Spain (-.3%) and Italy (1%) showed economic contraction. That's not good but bulls must think this is just old news.
Earnings news from Sears Holdings (SHLD) rallied 19% on spin-off news; Kohl's (KSS) reported lower earnings and guidance than expected and the stock was down by nearly 6%; popular Safeway Stores (SWY) also disappointed with the stock dropping nearly 8%; Target (TGT) reported results that pleased rallying the stock nearly 3% which, taken together, makes a mess of the retail sector (XRT) overall. American International Group (AIG), the bailed-out king, reported earnings that widely beat estimates ($.82 vs $63) and the stock rallied over 5% in late trading.
Getting the "shrug" treatment from investors was a continuation of higher crude oil prices despite a large increase in inventories. Oil (USO, USL) was higher by nearly $2.00 which will continue to drive gas prices (UGA) higher. Gold (GLD) was once again higher given a weaker dollar and the bullish green light from global central banks. Bond prices were rather flat.
Volume was remains light overall within this ongoing melt-up but they won't put this data on your brokerage statement. Breadth per the WSJ was positive.
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IWM - The iShares Russell 2000 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the small capitalization sector of the U.S. equity market as represented by the Russell 2000 Index. The index represents the approximately 2,000 smallest companies in the Russell 3000 Index.
QQQ -
PowerShares
Capital Management LLC is passionate about our goal of delivering the highest quality investment management available through one of the more benefit-rich investment vehicles ever created, the exchange-traded
fund. PowerShares
QQQ¿, formerly known as "QQQ" or the "NASDAQ- 100 Index Tracking Stock®", is an exchange-traded fund based on the Nasdaq-100 Index®. The Fund will, under most circumstances, consists of all of stocks in the Index. The Index includes 100 of the largest domestic and international nonfinancial companies listed on the
Nasdaq
Stock Market based on market capitalization. The portfolio is rebalanced quarterly and reconstituted annually.
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XLK - The Technology Select Sector SPDR® Fund, before expenses, seeks to closely match the returns and characteristics of the Technology Select Sector Index (ticker: IXT). Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
XRT - The SPDR® S&P® Retail ETF seeks to replicate as closely as possible, before expenses, the total return performance of the S&P Retail Select Industry® Index. Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
KBE - The SPDR® KBW Bank ETF, before expenses, seeks to closely match the returns and characteristics of the KBW Bank Index. Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
XLF - The Financial Select Sector SPDR® Fund, before expenses, seeks to closely match the returns and characteristics of the Financial Select Sector Index. Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
IBB - The iShares
Nasdaq
Biotechnology Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of companies primarily engaged in the biotechnology industry, as represented by the NASDAQ Biotechnology Index.
IEF - The
iShares
Barclays 7-10 Year Treasury Bond Fund seeks to approximate the total rate of return of the intermediate-term sector of the United States Treasury market as defined by the Barclays Capital U.S. 7-10 Year Treasury Bond Index.
Continue to Currency & Commodity Market ETFs
UUP - The
PowerShares
DB US Dollar Bullish Fund (Symbol: UUP) is based on the Deutsche Bank Long US Dollar Index (USDX®) Futures Index¿ (DB Long USD Futures Index). The Index, which is managed by DB Commodity Services LLC, is a rules-based index composed solely of long USDX® futures contracts. The USDX® futures contract is designed to replicate the performance of being long the US Dollar against the following currencies: Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish
Krona
and Swiss Franc.
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FXE -
CurrencyShares
Euro Trust is designed to track the price of the euro net of Trust expenses, which are expected to be paid from interest earned on the deposited
euros
.
GLD - The objective of the SPDR® Gold Trust¿ is for the Shares to reflect the performance of the price of gold bullion, less the Trust's expenses.
GDX - The Gold Miners ETF seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the NYSE
Arca
Gold Miners Index. The Index provides exposure to publicly traded companies worldwide involved primarily in the mining for gold, representing a diversified blend of small-, mid- and large- capitalization stocks. As such, the Fund is subject to the risks of investing in this sector.
SLV - The objective of the
iShares
Silver Trust is for the value of the shares of the
iShares
Silver Trust to reflect, at any given time, the price of silver owned by the
iShares
Silver Trust at that time, less the
iShares
Silver Trust's expenses and liabilities.
PPLT - ETFS Physical Platinum (PPLT) is designed to offer investors a simple, cost-efficient and secure way to access the precious metals market. PPLT is intended to provide investors with a return equivalent to movements in the platinum spot price less fees.
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JJC - The Dow Jones-UBS Copper
Subindex
Total
ReturnService
Mark is a sub-index of the Dow Jones-UBS Commodity Index Total
ReturnService
Mark and reflects the returns that are potentially available through an unleveraged investment in the futures contracts on physical commodities comprising the index plus the rate of interest that could be earned on cash collateral invested in specified Treasury Bills.
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DJP - The
iPath
® Dow Jones-UBS Commodity Index Total
ReturnService
Mark ETN is linked to the Dow Jones-UBS Commodity Index Total
ReturnService
Mark and reflects the returns that are potentially available through an unleveraged investment in the futures contracts on physical commodities comprising the index plus the rate of interest that could be earned on cash collateral invested in specified Treasury Bills. The commodities represented in the Dow Jones-UBS Commodity Index Total
ReturnService
Mark are rebalanced annually; however, the weightings fluctuate between
rebalancings
due to changes in market prices.
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USO - The United States Oil Fund, LP ("USO") is a domestic exchange traded security designed to track the movements of light, sweet crude oil ("West Texas Intermediate").
USL - The United States 12 Month Oil Fund, LP ("USL") is an exchange traded security that is designed to track the movements of West Texas Intermediate light, sweet crude oil (WTI)
IXC - The iShares S&P Global Energy Sector Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of companies that Standard & Poor's deems part of the energy sector of the economy and important to global markets, as represented by the S&P Global Energy Sector Index. The index is a subset of the Standard & Poor's Global 1200 Index.
Continue to Overseas Sectors & ETFs
EFA - The
iShares
MSCI EAFE Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the European, Australasian and Far Eastern markets, as measured by the MSCI EAFE Index.
EEM - The
iShares
MSCI Emerging Markets Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in emerging markets, as represented by the MSCI Emerging Markets Index.
EWG - The
iShares
MSCI Germany Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the German market, as measured by the MSCI Germany Index.
EWP - The iShares MSCI Spain Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the Spanish market, as measured by the MSCI Spain Index.
EWI - The iShares MSCI Italy Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the Italian market, as measured by the MSCI Italy Index.
EWZ - The
iShares
MSCI Brazil Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the Brazilian market, as measured by the MSCI Brazil Index.
RSX - The Russia ETF seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the
DAXglobal
® Russia+ Index. The Index provides exposure to publicly traded companies that are domiciled in Russia, and traded in Russia and/or on leading global exchanges. As such, the Fund is subject to the risks of investing in this country.
EPI -
WisdomTree
India Earnings Fund seeks investment results that correspond to the price and yield performance, before fees and expenses, of the
WisdomTree
India Earnings Index.
GXC - The SPDR® S&P® China ETF, before expenses, seeks to closely match the returns and characteristics of the total return performance of the S&P China BMI Index. Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
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
Consumer Sentiment and New Home Sales will be in focus on Friday. Earnings reports will taper-off with J.C. Penney and Newmont Mining featured. Thus far we've seen most of the earnings news from the S&P 500 but there still are a couple of weeks of reports to come.
Let's see what happens.
Disclaimer: The ETF Digest maintains active ETF trading portfolio and a wide selection of ETFs away from portfolios in an independent listing. Current positions if any are embedded within charts: Lazy & Hedged Lazy Portfolios maintain the follow positions: VT, MGV, BND, BSV, VGT, VWO, VNO, IAU, DJCI, DJP, VMBS, VIG, ILF, EWA, IEV, EWC, EWJ, EWG, & EWU.
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.
