Friday Never Happened: Dave's Daily

Goldman Sachs fraud charge ... Google earnings confusion. Let's forget Friday ever happened and get back to normal. What's normal? Light volume rally days and beyond that -- I know nothing.
Author:
Publish date:

Dave's Daily

By Dave Fry, founder and publisher of

ETF Digest

and author of the best-selling book

Create Your Own ETF Hedge Fund.

April 20, 2010

Image placeholder title

FRIDAY NEVER HAPPENED

Perhaps Friday was just a "one-off" options expiration, GS fraud, Google earnings confusion, overbought kind of day? So let's forget it happened and get back to normal. What's normal? Light volume rally days and beyond that--I know nothing.

The news yesterday sparking a rally was the SEC vote was only 3-2 in favor of the lawsuit against Goldman. That meant GS would win to bulls.

Tuesday is more about earnings which are trumping any worries over Greece and Goldman. Even Harley Davidson, the ultimate discretionary toy, beat estimates as did most other companies. And Goldman Sachs beat earnings by a mile thanks to (you guessed it) strong trading results. Further Apple just announced results that were way ahead of estimates. This really makes you wonder how qualified Wall Street analysts are in doing their jobs since no one has come close to accurate calls about much. They also seem stuck with the Sergeant Schultz excuse.

As stated, volume was light while breadth quite positive as we return to the previous pattern.

Image placeholder title
Image placeholder title

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.

Image placeholder title

Per Investopedia:  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.

Image placeholder title

Per Investopedia: 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

Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title

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

Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title

Continue to Currency & Commodity Markets

Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title

Continue to Overseas & Emerging Markets

Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title

Continue to Concluding Remarks

Apple knocked the cover off the ball. Analysts are paid a hefty sum to accurately predict earnings and over the past year they've collectively done a miserable job as understating results have been all too common. Credit Suisse is saying much of the Apple gains were due to tax benefits but perhaps that's just nitpicking great results. Apple is definitely the technology leader.

In after hours trading things are positive overall with the exception of Yahoo as per MarketWatch.

Image placeholder title

Wednesday a flood of earnings will be upon us. And we'll be watching if analysts get anything right.

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

twitter

and become a fan of ETF Digest on

facebook

.

Disclaimer: Among other issues the ETF Digest maintains positions in: MDY, IWM, TNA, QQQQ, EFA, EWY, EWJ, and EEM.

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.