Yes, today was pretty boring. Interesting stat of the day was from New-Home Sales which were supposed to come in around 430K but only showed 300K--a rather large miss. But, bulls were undaunted early and had things well camped prior to Ben & Co's non-announcement. After parsing the language, talking heads found less enthusiasm regarding the economy. I guess FOMC governors have read current data just like you and me.
Anyway, Fannie and Freddie are getting tough on home borrowers by
suing borrowers who strategically default on their loans to recoup the outstanding mortgage debt in jurisdictions that allow for deficiency judgments. More than $27 million paid in fraudulent claims for housing break and of those 241 were prisoners serving life sentences! Oh, and here's a change; FNM and FRE are implementing changes that might surprise you via Yahoo/Finance:
Q. How would the bill improve mortgage lending?
A. Most of all, lenders could no longer make a loan without verifying that the borrower can repay it. They would need to review the borrower's income, credit history and employment status. That might sound obvious. But lenders weren't required to do so in the past.
Also from the bad news department came word of more oil gushing into the Gulf as a robot struck the cap forcing it to break.
The best news of the day came from the U.S. soccer team which scored a goal despite dreadful officiating again to advance to the final round. Do you care?
More real economic news will be featured Thursday as Durable Goods orders and Jobless Claims will be front and center.
Volume was again a little heavier on another down day and breadth remains negative.
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 Major U.S. Markets
Nothing inspiring happening either way even on a Fed day. The bearish H & S tops dominate markets. You see them frequently and you shouldn't bet the farm on them being correct but when they are, you'll be hearing about it.
MDY & IWM:
The further into the bowels of major markets the worse things look on negative days.
Tech is joining the herd weakness and seems just blasé.
Continue to U.S. Market Sectors, Selected Stocks & Bonds
XLF & KBE:
Wall Street is on a full-scale attack to lessen the Volcker Rule as noted by
which could be entitled: "we made it tougher without making it really tough".
Materials are an important sector to watch as it's the chain of life for industry.
XLY, BBBY & NKE:
The consumer sector looks a little shaky as folks are cutting back perhaps. BBBY fell on disappointing forecast and NKE, despite good results from the World Cup, also missed on revenues.
XHB & IYR:
Homebuilders are probably doing better on the charts than one would think given the news. People forget they have to keep building to keep the business alive. REITs have been performing well until recently and to me they're just part of a yield hunt.
: I think much of the decline here has to do with the lack of energy policies, grid improvements, environmental issues, new plants and so forth. Further, with economic growth anemic revenues for utilities will suffer.
IEF, TLT & TIP:
The best performing sectors of late are the least regarded--so often this is the case.
LQD & HYG
: The hunt for yield with safety highlights the different performance here.
Continue to Currency & Commodity Markets
$USD/DXY, FXE & CNY:
There's not a lot of enthusiasm for currencies at the moment and the yuan was just so much BS from China before the G-20.
Let's just remember its options expiration in the precious metals this week so expect some nonsense via the COMEX.
Commodity tracking indexes in general are heavy with energy and as it goes so they go.
Supply data hurt prices Wednesday.
XLE & UNG:
Ugly market's in energy and it's painful to watch.
Base metals are trying hard to make a comeback. If they do it means growth and demand in Asia is picking up.
Continue to Overseas & Emerging Markets
Not a good Wednesday or week at all but the week's not over.
Doing better than most sectors and that's about all one can say.
: BRIC's continue to lead the way and we're just running out of time again Wednesday.
Continue to Concluding Remarks
You couldn't get worse data from New-Home Sales than what was delivered today. ETFs making a difference are still as outlined above. Certainly there are others and we're always open to your requests.
Clearly the Fed announcement amounted to little. What the bulls have going for them is the continued presence of the "punchbowl"--cheap money for those who can get it and those are the Primary Dealers.
The financial reform efforts within the congress are being watered down and won't amount to anything too serious for major firms but will, as usual, fall heaviest on small firms. It's just the way of things since the little guys don't have lobbyists or money.
Durable Goods and Jobless Claims are on tap for Thursday.
We only have another couple of days before a summer attitude sets in and volume might get even lighter. That should make the machines happy as it makes their work easier.
The bottom line is this market is directionless and easily pushed around by the HFT's. Like you, we're waiting for meaningful and durable trends to develop and the past two months hasn't seen this.
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: TIP, SHY, GLD, DGP, and CNY.
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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