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Stocks dropped sharply early then rallied with the appearance of the recently dormant 2:15 PM Buy Program Express only to fall sharply into the close. Perhaps the late swoon had something to do with news of Boehner being unable to get the House GOP on board with his proposal. (I thought they counted noses before going public.) In this news-driven environment, and with the algos feasting on keywords to launch trading programs, the volatility can only increase.

Earnings and economic news took a back seat to all this political intrigue. Even so, Consumer Confidence was slightly higher but still low at 59.5; the Case-Shiller Home Price Index showed YOY price declines of 4.5% and the New Home Sales missed estimates 312K vs 321K. Earnings news was dominated by a poor Netflix (NFLX) report, Broadcom (BRCM) gain, a 3M (MMM) miss, a Biogen (BGEN) beat and after the bell Amazon (AMZN) beat with earnings while Juniper Networks (JNPR) missed.  

Gold prices rallied once again and are becoming overbought. Should a deal finally be struck, and with options expiration for metals at hand, there could be a substantial drop. Further, and for the same reason, the dollar dropped to fresh lows against just about any other currency. Bonds rallied due to a successful $34 billion auction. Oil prices advanced as did many other commodities on dollar weakness.

Volume was ultra-light once again which exaggerated volatility along with obligatory program trading. Breadth per the WSJ was 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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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

Not that it matters but we still have plenty of earnings still to come out for the next two weeks especially. Economic data on Wednesday will feature Durable Goods Orders and the Fed's Beige Book.

Most will focus on debt negotiations and it's amazing to hear the

White House Press Secretary Carney admit the president does not have a plan

.

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.