Economic Data -- Que Sera Sera: Dave's Daily

Thursday and Friday bring more important data. Taken together, they should give investors plenty to think about.
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Thursday and Friday bring more important data with GDP estimate, Jobless Claims (all estimates "locked" at 450K), Chicago PMI, Personal Income & Spending, U of Michigan Consumer Sentiment, Construction Spending and the ISM Index. These, taken together, should give investors plenty to think about.

The current theme of both good and bad data as good things will be tested. But, let's remember, Thursday marks the end of the quarter while Friday's the start of a new month. With the former, expect some window dressing where possible and the latter might mean who gives a rip.

As trading volume shrinks layoffs in the financial sector are, and will be the result. Fearless heretic and analyst Meredith Whitney estimated yesterday 80K Wall Street types will lose their jobs in 2011.

ICI (Investment Company Institute) has just

noted domestic equity mutual funds saw a 21st sequential outflow of $2.5 billion, bringing the total year-to-date to over $70 billion.

Volume has told us another thing; the only folks trading are HFTs and hedge funds. Some might suggest a few banks with their POMO from heaven but how will we ever know? There's no transparency from the most transparent....oh nevermind.

Wednesday's volume was especially light as tension builds before the economic news onslaught. Breadth was mixed.

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SPY

: Up against it plain as day.

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MDY & IWM

: Further down into the bowels of equities are the more volatile lesser names.

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QQQQ, AAPL & XLK

: Old Chinese proverb, "even the monkey can fall from the tree" reminds us of Apple's vulnerability.

Continue to U.S. Sectors, Stocks & Bonds

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XLB

: Materials sector investors not showing a lot of confidence before data.

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XLF

: Drifting along in the trading range with little support. Hell, even the government is looking for an exit.

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XLY

: The word from Li & Fung in China is they've shipped a lot of merchandise to retailers now the goods need to be sold.

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XLI

: I'm not gonna change things from yesterday with everything looking alike: "tastes like chicken".

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IYR

: How about tastes like sh**t?

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IYT

: What needs to happen is good shipping for the holidays.

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XLU

: Limping higher.

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XLV & IBB

: Healthcare is normally a defensive sector but like many other sectors it looks tentative. Biotechs remain and area of broad interest with the big boys wanting to scoop up promising companies. But, the sector is never about earnings just promise.

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IEF & TLT

: Strange markets as stocks drop some today and so do bonds.

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MUB

: Watching the Fed and Treasury actions, debt levels in municipalities and the appetite of investors is like watching a game of three card monty. The Treasury sells bonds, the Fed buys the bonds and government sends stimulus money to bankrupt municipalities. It's all pretty crazy. But, I was a bond dealer in the 1970s when NYC was going broke and bond yields soared to double digit until Jimmy Carter bailed them out. Things have changed now as there's an overwhelming sea of debt and trouble in every city, state and town. Meredith Whitney again told it like it is yesterday on this issue as well.

Continue to Currency & Commodity Markets

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$USD/DXY

: Let's see how the week plays out with data the next two days.

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UDN, FXE, FXF & FXY

: The government is willing to let Uncle Buck collapse it seems. Meanwhile currency wars are erupting individually across the globe.

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GLD, SLV & AGQ

: Gold is steadily higher while silver markets continue to blaze new highs in an almost as good as gold manner.

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DBC

: Many commodity markets are moving higher but energy is the heavy weight here.

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$WTIC & XLE

: Have I mentioned this sector drives trend-followers nuts? Pass the Prozac.

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DBB & JJC

: Base metals have a rebound but most of this is dollar related.

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XME

: Stocks up overall as are the commodities related to XME.

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DBA & JJG

: Ag commodities and grains especially are in profit-taking mode right at resistance outlined here for months.

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MOO

: Overbought correction? Possibly, but it also has something to do with Mosaic having some problems.

Continue to Overseas Markets & ETFs

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EFA

: On and off problems within the eurozone continue to bob to the surface. The ECB does its own POMO for the afflicted Irish banks.

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EEM

: Many EMs within this ETF and others similarly constructed are more developed than emerging at this stage. But, the construction is producing good results.

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EWJ

: U.S. and other investors benefit from the rising yen as much as the equity market.

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EWA

: Quiet Wednesday with more action certain on Thursday and Friday.

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EWC

: Canadian stocks are in better shape and so is the country.

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EWZ

: Brazil markets were propped higher today by a recommendation from JPM.

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EPI

: India markets restart their journey higher but have become overbought.

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FXI

: Same look, same comment.

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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

So, we have plenty of data coming out the next two days. It will test the new Orwellian thesis that markets should rise with good or bad news given the Fed's QE policy. I'm not a believer just a tape follower.

In ETF news

MSCI Philippines Investable Market Index Fund (EPHE) was launched by iShares. This is one we've been waiting for and will be putting on the menu soon. Further, tomorrow I'll be taking a look at the major market in the Philippines.

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: MDY, QQQQ, XLI, IYR, XLU, GLD, SLV, AGQ, DBA, DBB, BDD, MOO, EEM, EDC, EWA, EWJ, EWC, EWZ & 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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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.