Greece Keeps the Lady Waiting: Dave's Daily
"Never put off until tomorrow what you can do the day after tomorrow"
Mark Twain
There really isn't much more to say about the Greek situation. Monday we mentioned the Argentine default in 2001 but noted it wasn't in a common currency treaty with others--a major difference. Still the Greek situation remains a cloud overhanging markets. Some think a default is inevitable while others think Greece must agree to politically unacceptable terms. The contagion is the problem since the elephant in the room is Italy, a much bigger deal.
China stated Tuesday that industrial growth might slow and German industrial output unexpectedly sank 2.9% versus expectations of no change. These aren't encouraging.
Meanwhile rumors surfaced late on Tuesday that Greeks are putting a satisfactory deal together that would placate their EU masters and private debtors. This caused the dollar to fall late after being stronger early and also caused gold to rise after a few days of losses. Fed Chairman Bernanke also stated, despite a recent good employment report, "We're going to remain accommodative". So, a weaker dollar and a full punchbowl is just what Mr. Market ordered for bulls--at least what's left of them. Crude oil prices also reversed course and rallied while bond prices fell.
So, the light volume melt-up in U.S. equity markets continues. Many investors (you should read my emails sometime) are scratching their heads in disbelief as stocks rally. After all, good economic reports seem rather contrived and there isn't much from this area this week. Earnings reports have been just okay and guidance has been less than stellar. Earnings from Coca-Cola (KO) beat estimates, Boeing (BA) was down on production delays, Disney (DIS) beat estimates but the stock was lower in late trading.
As stated, trading volume remains very light and breadth per the WSJ was positive to mixed.
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SPY - The SPDR® S&P 500® ETF is a fund that, before expenses, generally corresponds to the price and yield performance of the S&P 500 Index. Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
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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Continue to U.S. Sector, Stocks & Bond ETFs
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.
XLY - The Consumer Discretionary Select Sector SPDR® Fund, before expenses, seeks to closely match the returns and characteristics of the Consumer Discretionary Select Sector Index. Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
XLI - The Industrial Select Sector SPDR® Fund, before expenses, seeks to closely match the returns and characteristics of the Industrial Select Sector Index. Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
IYT - The
iShares
Dow Jones Transportation Average Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of Dow Jones Transportation Average Index.
VNQ - Vanguard REIT ETF seeks to provide a high level of income and moderate long-term capital appreciation by tracking the performance of a benchmark index that measures the performance of publicly traded equity REITs.
CVY - The Guggenheim/
Zacks
Multi-Asset Income Index ETF (NYSE:CVY), the "Fund", seeks investment results that correspond generally to the performance, before the Fund's fees and expenses, of an equity index called the
Zacks
Multi-Asset Income Index (the "
Zacks
Multi-Asset Income Index" or "Index"). The Fund expects to use a sampling approach in seeking to achieve its objective.
DVY - The iShares Dow Jones Select Dividend Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Select Dividend 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.
HYG - The iShares iBoxx $ High Yield Corporate Bond Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the iBoxx $ Liquid High Yield Index, a corporate bond market index compiled by the International Index Company Limited.
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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.
DBB - The
PowerShares
DB Base Metals Fund (Fund) is based on the Deutsche Bank Liquid Commodity Index - Optimum Yield Industrial Metals Excess Return¿ (Index) and managed by DB Commodity Services LLC. The Index is a rules-based index composed of futures contracts on some of the most liquid and widely used base metals - aluminum, zinc and copper (grade A). The index is intended to reflect the performance of the industrial metals sector. You cannot invest directly in an index. Ordinary brokerage commissions apply.
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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").
UNG - The United States Natural Gas Fund LP (UNG) is an exchange traded security that is designed to track in percentage terms the movements of natural gas prices.
UGA - The United States Gasoline Fund LP (UGA) is an exchange traded security that is designed to track in percentage terms the movements of gasoline prices.
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.
DBA - The PowerShares DB Agriculture Fund is based on the Deutsche Bank Liquid Commodity Index Diversified Agriculture Excess Return¿ and managed by DB Commodity Services LLC. The Index is a rules-based index composed of futures contracts on some of the most liquid and widely traded agricultural commodities. The Index is intended to reflect the performance of the agricultural sector.
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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.
GREK - The Global X FTSE Greece 20 ETF seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE/ATHEX 20 Capped 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.
EWU - The
iShares
MSCI United Kingdom 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 British market, as measured by the MSCI United Kingdom 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.
ILF - The iShares S&P Latin America 40 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of companies in the Mexican and South American equity markets as represented by the Standard & Poor's Latin America 40 Index.
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.
EGPT - The Egypt Index ETF seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Egypt 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
Are we still overbought? Very much so especially if you view the McClellan Summation Index ($NYSI) viewed just above. A market this overbought with light volume can be accident prone. Should anything go wrong a heavy volume sell-off could ensue.
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. We maintain the following positions: QQQ, XLI, XLY, XLF, EEM, EPI, CVY, DVY, GLD, GXC, ILF, 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.
