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Today's melt-up was caused by frantic bulls on light volume and little news. I guess it's like with the euro recently --"no news is good news." What news there was revolved around State Street's better than expected earnings forecast and outlook so the banks took off along with everything else.

The chart posted yesterday showing a DeMark "9" completed set-up told us the downtrend would at least pause and perhaps reverse if only temporarily. Thankfully we weren't short as a result. No matter, we've been spectators overall since mid-April.

I also noted yesterday that earnings season would start next week and "perhaps" that could power markets higher since economic data was still dreadful. Obviously the HAL 9000s were looking at earnings as the needed spark to get a stampede started.

While volume was rather light again breadth probably put in a positive 90/10 day.

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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 Major U.S. Markets

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SPY:

Do the old chart techniques have any validity in an algo HAL 9000 world? This is interesting given H&S tops, death crosses and broken support lines. Perhaps modern algos don't give a rip about these things what with yields low and expensive computers and PhD operators these indicators may be just passé. After all, there's high overhead to deal with so who cares about economic data?

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MDY & IWM:

Hit harder earlier and not as robust to the upside in this rally since these sectors are more sensitive to economic data than with how State Street is doing.

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QQQQ:

At the end of things all that's left in the U.S. is tech so we'd better keep a good goalie on the ice at all times.

Continue to U.S. Market Sectors, Selected Stocks & Bonds

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AAPL

: Evidently, Apple if dealing with issues revolving around App Store thefts, "death grip" issues for the iPhone; iPad security issues and AT&T reception problems. Apparently, consumers are forgiving and demand keeps rising warts and all.

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XLF & STT:

State Street is in this group and helped it to rally mightily Wednesday. But STT is a unique company with issues much different than BAC, JPM or C for example.

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XLB:

Again we'll focus on a few sectors that matter including materials which are the well-springs of economic and industrial growth.

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XLY & XRT:

Now we're looking at the core American consumers and it's not a pretty picture despite today's uptick. You can run but you can't hide from economic reality.

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IYR:

Now we're seeing what's really pretty funny. There hasn't been a good report on commercial real estate in months. Sure they've been able to refinance some debt at a lower rate but still the $1.3 trillion in debt remains outstanding. It's all due in just a few short years.

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IYT & $BDI:

Transports and the Baltic Dry still don't paint a great picture of commerce.

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IEF & TLT:

Bonds still overbought gave ground as stocks rallied. Nothing unusual there.

Continue to Currency & Commodity Markets

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$USD/DXY, FXE & FXY:

Uncle Buck is fading fast but is now at support as bad news from Europe is dormant. The yen came back to earth while there's still talk of Swiss National Bank intervention in the euro.

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GLD:

Gold is not the hot item presently as risk worries abate. It's strange though that the dollar would fall along with gold.

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DBC:

Higher energy prices helped push commodity tracking indexes higher even though we still remain in a long trading range.

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$WTIC/CRUDE OIL:

Crude oil caught a bid today along with stocks which is odd enough don't you think?

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XLE & BP:

Rumors ("early truths"?) swirled Wednesday that BP was closing the leak shortly. This helped the stock market overall today; but, what is the damage going to be?

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DBB:

Perhaps it's just old support and resistance revisited.

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DBA:

Grains are also just marking time waiting for better fundamental news.

Continue to Overseas & Emerging Markets

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EFA:

Europe is healing but it may be only their disease is in remission.

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EEM:

We did our interview today with Business Monitor International (London) Wednesday and it will be posted by Friday hopefully.

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EWJ:

Was there any good news from Japan to account for a rally there? No.

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EWY:

Samsung is reportedly ready to report great earnings but I wonder about the outlook since most homes seem saturated with big screen TVs.

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EWA:

Higher with commodity prices, favorable tax ruling and the sense of stronger demand from China.

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EWZ:

Brazil is up with commodities as it should be.

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RSX:

Just another high beta commodity play.

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EPI:

More stability in India than in any developed market as internal growth remains strong while the government focuses on containing inflation.

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FXI:

China markets were very strong Wednesday but you don't see it that well in FXI. This is due to Petro China that is thinking of making some large acquisitions which may be dilutive. Hell, maybe they'll buy BP!

Continue to Concluding Remarks

Bulls and TPTB pulled a rabbit out of their hats today. The news was good from State Street of course but it's not your typical bank. More importantly perhaps were rumors circulating that BP was about to stop the leak.

Nevertheless, Wednesday was another day of a strong market melt-up on low volume. The only conclusion is Da Boyz at work while most investors still sit on the sidelines or in bonds.

Tomorrow is Jobless Claims again and we'll see how they spin it since every estimate (usually around 450K) hasn't changed much from week to week.

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: NONE.

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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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.