No, I wasn't alive to watch the Four Horsemen of Notre Dame play football but I did watch the DJIA today. As you know this is a "price weighted" index. Four companies that rose today were among the priciest: BA, CAT, CVX and TRV. The rest were mixed to flat. Imagine if TPTB added AAPL or GOOG to the index. But, for most Americans, the DJIA is what they see most every day if they care. Cynically, as some say, it's just "window dressing for the tourists" to wit the current headline at the WSJ: "Stocks Close at 2 ½ Year High".
Does it really matter that four stocks accounted for the positive headline? If, you're looking deeper into what's really going on in markets, sure it should. But many investors aren't that curious especially when interest rates remain near zero and
is ubiquitous encouraging investors to take more risks.
No matter unemployment shows no sign of improving, housing is still in the dumps and key strategic countries (Bahrain, Libya, Egypt, Yemen, Algeria and Tunisia) are all aflame.
There wasn't any economic data today other than Bernanke defending his policies. And, there was little earnings news.
The dollar was weak and most commodities were strong while bonds sold-off.
In case you're interested I'll be doing a webinar for SFO Magazine "Around the World with ETFs". You may
to listen and comment for free.
Volume for an options expiration day was light but perhaps ahead of a three day weekend is understandable. Breadth was pretty flat per the WSJ.
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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.
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.
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
Four stocks controlled most of the action today. For most people it means nothing since markets were up. Meanwhile President Obama was dining with his
in the Bay Area. That's nice since a free dinner with the POTUS is always a treat.
This is a very strange market overall. You shouldn't argue with the tape but looking behind the curtain what's driving markets higher is clear--QE and zero interest rates. Volume remains light and once this Fed policy ends "watch out".
Have a great long weekend!
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