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When you lose people's trust it's really hard to win them back. Second, investors have short memories. Many investors were burned by the 2008 bear market just as they had been in the dot.com bear market beginning in early 2001. But, with all systems green in 2003 and 2009 respectively, short memories, greed and good marketing sucked investors back in. The "flash crash" in 2010 shattered investor confidence. QE2 pushed stock prices higher once again but in retrospect the rally now seems hollow.

But, there's another problem, demographics. During the 1980s until now markets were dominated by baby boomers. They're entering retirement making investing for them commonly more conservative. Succeeding generations in developed countries are smaller, making the investing audience more challenging for the industry. Most of what younger generations have experienced is two bear markets. A third bear market in a decade would be a complete turn off. So, the bullish hope must spring from emerging markets with better demographics and some with "we're better than you" pride. In developed countries there's little to cheer about economically, fiscally and politically. There's much more to it than this but these to me seem important.

Options expiration, which occurred Friday, can always create some unusual action due to mechanical versus any news or fundamental concerns. This Friday, investors aborted an early rally in favor of the exits. Even late in the day when options specialists are hunting down strike prices, things for a moment looked like they might bounce, but no. Over the closing minutes, those in the options pits were hunting down lower strike prices to exercise. So, down we went and so it goes.

Gold was higher again, the dollar index was flat to lower, commodities overall were slightly higher and bonds were only a little higher in price.

Hewlett-Packard (HPQ) led markets lower and is a component in the price-weighted DJIA thus lessening its impact. Nevertheless, the company' sharp decline had a marked and negative spillover effect. Only a few names were higher today like McDonalds (MCD) and J.C. Penney (JCP). 

Stocks once again swung wildly with the DJIA trading range nearly 300 points wide. Volume is still elevated and breadth per the WSJ was quite negative once again.

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Continue to U.S. Sector, Stocks & Bond ETFs

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Continue to Currency & Commodity Market ETFs

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TheStreet Recommends

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Continue to Overseas Sectors & ETFs

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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

I don't think even the toughest investor is willing to endure three bear markets in one decade frankly. That's about all there is to say.

Bernanke's on deck from Jackson Hole Summit for his speech coming Friday next. He's probably got a lot of input from TPTB like the Primary Dealer network, Geithner, Obama, Bill Gross, Warren Buffett, Arab Sultans, the Chinese, Japanese and ECB. There will be focus groups and they'll be testing all sorts of language and hidden meanings.

One person who is annoying as hell is Fed Governor Dudley (Dudley Do Right?) who speaks as if he's from another planet.

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. Our Lazy & Hedged Lazy Portfolios maintain the follow positions: VT, MGV, BND, BSV, VGT, VWO, VNO, IAU, DJCI, DJP, VMBS, VIG, ILF, EWA, IEV, EWC, EWJ, EWG, EWU, BWD, GXG, THD, AFK, BRAQ, CHIQ, TUR, & VNM.

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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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

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.