Hal Stabilizes Markets: Dave's Daily - TheStreet

Hal Stabilizes Markets: Dave's Daily

Ho-hum, it was another light volume day making it easy for those wanting to prop things to do so.
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Ho-hum, it was another light volume day making it easy for those wanting to prop things to do so. Sometimes those with the right technology can just program what they want and walk away for the day. The more money you've got to trade combined with light volume, the greater impact you have. Gee, who has that kind of money I wonder? Trading desks, hedge funds and perhaps, if you believe the conspiracy theories, the government.

The news Wednesday began with worse than expected housing data which was quickly brushed-off while better than expected Industrial Production late in the day was featured. FedEx didn't help matters offering poor guidance, Fannie and Freddie were delisted (we won't have them to kick around anymore until GS/JPM do a secondary) and BP halts dividend. The only surprise was FedEx which closed lower by roughly 6%. It's interesting how we can take one important stock after another, isolate it and go on about HAL's business.

As stated, volume was light and breadth was somewhat negative overall.

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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. Still overbought 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. Summation Index turning back higher.

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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. Fear rapidly fading.

Continue to Major U.S. Markets

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SPY:

It wasn't so much a "stick save" Wednesday as just a "managed" affair.

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MDY & IWM:

Mid and Small-caps are in a trading range but MDY is making a better showing thus far. Remember IWM is the most economically sensitive of the major indexes.

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QQQQ:

Take away AAPL and what's moving in tech--semi's featured again below.

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

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AAPL, SMH, USD, INTC & NOK

: A random walk through tech land reveals a few winners and losers. Semi's are powering markets higher along with AAPL. If you need to turbo charge your semi holdings you can always go with

USD

(ProShares 2 X Semiconductor ETF) 

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XLF, C, BAC, GS, JPM & FRE:

So, the new financial regulations are moving through congress and back door deals are being made as usual. Even Arkansas Blanche Lincoln is caving on here demand for separating swap desk trading from banks, monoline insurance companies and rating agencies have been spared. So much for that "change" thing.

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XLB:

Materials are doing okay with the dollar sliding some and commodities rallying.

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XLY:

Consumer's must be feeling it or are they just in the program buy basket?

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IYR:

REITs are being sought for yield as other alternatives aren't appealing. Buyers must believe that commercial real estate debt of $1.3 trillion is no problem.

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IYT & FDX:

Well, you can lose one along the way and still challenge resistance.

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IEF, TLT & TIP:

Bonds are just moving along near the top of resistance. Now the only question is, if there's no inflation why are TIPs so strong?

Continue to Currency & Commodity Markets

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$USD/DXY & FXE:

The dollar has been subjected to intervention seen and unseen for the last two weeks.

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GLD:

Its "closing" highs or lows that matter most when observing weekly charts and the week's not over.

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DBC:

Commodities are moving higher lately only because of dollar movement and not much else.

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$WTIC/CRUDE OIL:

Its all about the dollar once again versus demand. Supplies were higher and there's plenty of oil to go around--especially in the Gulf.

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XLE, UNG & BP:

Stocks rallied with BP's announcement they're willing to pay the $20 billion into an escrow account. Further the dividend may be suspended for three quarters. This won't go over well in Britain.

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DBB:

Base metals sold off sharply on Wednesday taking back half of previous gains. Might there be a slowdown somewhere?

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DBA:

The rally in softs (coffee, cocoa and sugar) continues and grains too abetted by a falling dollar.

Continue to Overseas & Emerging Markets

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EFA:

European markets were flat today overall and the dollar didn't do much either. There were rumors (denied) that Spain needed an additional $300 billion.

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EEM:

EM's are helped by rising commodity prices and general enthusiasm for more risk.

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EWY:

Korean markets are impervious to war or much else it seems. The little man in the North with the high heels is just an annoyance with nukes. The other thing to remember is Samsung (despite lower TV sales at BBY) is manufacturing the A4 chips for AAPL (iPhone 4 & iPad) which must be a good gig.

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EEB:

I've run out the clock today so using EEB will shorten the task and still get things done.

Continue to Concluding Remarks

We're heading into Quad-Witching expiration with markets being well-managed. Volume remains light as investors prepare themselves for the inevitable volatility beginning late Thursday afternoon and concluding Friday. Expectations are for a massive rise in volume as investors try to square-up positions and some miscreants on the floor try to disadvantage those holding puts and calls with tempting strike prices.

The banks are sliding through the changes to financial regulations with ease. You can rest assured Barney Frank in the House and Charles Schumer in the Senate have their friend's backs or so it seems. 

Thursday will also feature Jobless Claims as usual. And, most estimates are fixed, and haven't changed for weeks, at around 450K. We'll also be treated to Leading Indicators (estimated at .4%) and the Philly Fed (estimated at 20).

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: GLD, UUP, EFZ & EUM.

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.