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Bulls Get Edgy: Dave's Daily

The dollar rallies, gold and commodities fall, stocks get wobbly, bonds get sold, and frankly, investors just lose their nerve.
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The dollar rallies, gold and commodities fall, stocks get wobbly, bonds get sold and frankly, investors just lose their nerve. Despite the obligatory end-of-day "stick save" today, perhaps investors wish to square-up before the election on Tuesday and the Fed decision Wednesday.

Earnings from companies like DuPont continue to beat estimates while Durable Goods Orders, ex-airplanes and military, was weak. This means corporate investment in new stuff remains weak as well. But, hey, doesn't this more good news for those want a strenuous QE effort?  Oh, the mystery of it all!

PIMCO's Bill Gross stated to clients that the Fed was running a Ponzi Scheme which he dubs a

"Sammy Scheme"

TST Recommends

. Also highly regarded market veteran Jeremy Grantham lambasted what the Fed was doing as

"The Night of the Living Dead

".

Then we have the 25

th

straight week of equity mutual fund outflows combined with another round of POMO tomorrow which might take up the slack.

In the meantime, you may tune in to our

video podcast

with Dan Dolan, Director of Wealth Management Strategies for the Select Sector SPDR Trust. We discuss the many sector ETFs, the indexes they're linked to, and most importantly, where the positive or negative money-flow is whether from technology to financials.

Volume increased in good two-way action today but breadth wound up the day negative.

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Continue to U.S. Sectors, Stocks & Bonds

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Continue to Currency & Commodity Markets

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Continue to Overseas Markets & ETFs

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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.

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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.

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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

After the close of trading Symantec (SYMC) reported great earnings and the stock is up 5%. So, earnings do continue to roll-in and are important. The real news comes on Tuesday and especially on Wednesday. The Fed absent the usual political pressure may act as it sees fit with the election out of the way.

With many stock sectors at resistance and looking very much the same technically what happens after Wednesday should tell the tale. We might then be able to punch through resistance depending on the course the Fed chooses. It will be interesting and more important than most of these meeting results.

Tomorrow will feature more POMO operations and these vie with equity mutual fund withdrawals with the Fed having the bigger wallet methinks.

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

twitter

and become a fan of ETF Digest on

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.

Disclaimer: Among other issues the ETF Digest maintains positions in: SPY, IWM, QQQQ, QLD, XLB, FAZ, XRT, TBF, TBT, UDN, DBC, GLD, DBA, DBB, EFA, EEM, EWZ, RSX, EPI, FXI and XPP.

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.