Stock Market Thrill Ride: Dave's Daily

What is bugging Mr. Market? Are prices just too high? Are European debt issues scaring the hell out everyone?
Author:
Publish date:
Image placeholder title

Another day, another reversal and this one was a doozy. (Do you think the guy in the image above body is still attached to his legs?) 

I'll admit to some nervousness lately since we're carrying so much cash in portfolios. One portfolio is all cash so when there's a big up day you feel silly and then today not so much. But, given market action these feelings have been on a roller coaster.

What's bugging Mr. Market? Domestic economic news was good today, right? Are prices just too high? Is the action getting toppy like I postulated the other day? Are European debt issues scaring the hell out everyone? Feels like all those things are operative today anyway.

The pattern we've been pointing out these many months, high volume selling days (distribution) and low volume melt up days, continues. This is a very bad sign.

Volume was heavy Tuesday and breadth was highly negative and is pushing a 10/90 day based on preliminary data from the WSJ below.

Image placeholder title
Image placeholder title

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.

Image placeholder title

Per Investopedia:  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.

Image placeholder title

Per Investopedia: 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

Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title

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

Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title

Continue to Currency & Commodity Markets

Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title

Continue to Overseas & Emerging Markets

Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title
Image placeholder title

Continue to Concluding Remarks

There's little to add to commentary since charts say it all. If you've been following the last half dozen posts you'd have a headache from the volatility.

Today was a 90% down day (volume and shares 90% on the downside) according to reader David Hurwitz who sent his summary below:

Image placeholder title

We're fretting rightfully about all manner of issues including: terrorism, an epic oil spill, deficits and a mountain of debt. In Europe, no one believes the bailout package for Greece is either enough or will be implemented at least not without violence. (Imagine in Greece, many public workers can retire on full pay at age 50-55!)

Wednesday is ADP Employment data and ISM Services but, the news cycle will contain plenty of fresh grist from the mill.

Yes we have some positions but most are tiny and "today" we're happy in that regard. Tomorrow is another day.

Let's see what happens.  You can follow our pithy comments on

twitter

and become a fan of ETF Digest on

facebook

.

By Dave Fry, founder and publisher of

ETF Digest

and author of the best-selling book

Create Your Own ETF Hedge Fund.

Disclaimer: Among other issues the ETF Digest maintains positions in: MDY, IWM, QQQQ, LQD, TIP, UUP, YCS, DYY, UCO, EPV, DGP and FXP.

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

.

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.