Markets Rally on Earnings: Dave's Daily - TheStreet
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The important index for Main Street, the

Dow Jones Industrial Average

hit a fresh high Wednesday as the price weighted index was led higher by the highest priced stocks (BA, CAT, CHV, MCD, MMM, UTX & XOM). This is the stuff that will make for bullish and confidence boosting headlines. Other indexes and associated ETFs were also much higher but the focus will be on the DJIA for today.

There were casualties throughout the day as the dollar fell causing commodities overall to rise. This won't be bullish for long unless you're long this sector as it will wear on consumer confidence and spending. But, for now, the bulls have the tape to pump.

Earnings were plentiful but bullishly cherry-picked rewarding some and shrugging off others.

Intel's

(INTC) - Get Report

report was cheered leading the market higher overall. At the same time reports from

Wells Fargo

(WFC) - Get Report

,

AMR Corp.

(AMR)

,

IBM

(IBM) - Get Report

and

Cree

(CREE) - Get Report

were downplayed. This has been the consistent behavior of this market for a long time--accentuate the positive, negate the negative.

More earnings will roll-out after the bell with

Apple

(AAPL) - Get Report

in the spotlight.

We've told members for a long time now that the best course of action is to remain in Lazy Portfolios like we've crafted for now. When the Fed ends (if they ever do) QE then more active positions can be considered. For now, you can't fight this deluge of liquidity. Further, stocks can inflate too as select sectors did in the late 70s.

Also consistent is the melt-up on light volume with some holiday-like trading. Breadth per the WSJ was quite positive.

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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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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

There were plenty of earnings reports after the bell. Apple is pacing gains overall, up 4%,

F-5 Networks

(FFIV) - Get Report

, up 12%, and

Qualcomm

(QCOM) - Get Report

, up nearly 5%, while

American Express

(AXP) - Get Report

is down 2%. Expect more action tomorrow with earnings.

Economic data will feature Jobless Claims which will be spun as good no matter the data (bad = more POMO: good = great). The Philly Fed will also be closely watched.

Nevertheless, the news cycle continues but clearly good earnings are in view with 80% beating analysts' forecasts. This means those guys either suck or deliberately low-ball estimates.

All this liquidity from Uncle Sugar is directly routed to the Primary Dealers. It eventually works its way into corporate balance sheets whereby companies like IBM can sell bonds at 1% interest and buy back shares making earnings look better on the reduced amount outstanding. Does it help with jobs in the U.S.? No, because IBM like others outsources this to other countries. Either blame American labor costs or unfair trading practices from abroad.

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

.

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.