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Current market action should come from Hollywood. This marks two consecutive weeks marked by large stock market declines followed almost immediately by large rallies of equal amounts.

There are some differences especially with large volume on declines followed by low volume rallies. This is easy to understand given resting stops being hit on declines and melt-ups without these inconveniences.

Cherry-picking good news has also been a hallmark of current markets. Jobless Claims data improved markedly Wednesday while previous poor data had been routinely ignored. Personal Income was higher and that was seized on to indicate a great holiday shopping season not to mention the

view of crowded parking lots from outer space

before Black Friday. Orders for Durable Goods fell sharply below expectations which should mean lower GDP data ahead. Also, New Home Sales fell off a cliff and even Homebuilders' shares rallied. The bad news means the Fed will keep on with QE. Therefore, we're back to that "win-win" market where bad news is good and good news is better".  

Oh and those insider trading investigations are now leading to arrests and soon many perp-walks but that's for another day as Wednesday we party.

As for Korea, that's just like "so yesterday" as EWY (iShares South Korea ETF) rallied sharply over 3.5%.

Volume was holiday light and 40% lower than Tuesday's large decline. Breadth reversed course as well being strongly positive.

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Continue to U.S. Sectors, Stocks & Bonds

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Continue to Currency & Commodity Markets

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Continue to Overseas Markets & 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's a movie script here somewhere as markets certainly make life interesting and even entertaining. This marks the 29

th

straight week of equity mutual fund withdrawals as individual investors leave Wall Street for CDs and Black Friday.

The juice for markets comes from ETFs, Hedge Funds, overseas investors and, of course, the High Frequency Traders. Is this any way to run a market?

The action seems "managed" and that comes from Primary Dealers enjoying free money from on high and some hedge funds. It will eventually turn as we see more perp-walks from a wide variety of money managers for insider trading. This is another turn-off for Main Street who would rather spend money at Best Buy than reward cheats on Wall Street.

We won't be posting on the half-day Friday unless something blows up...literally.

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: SPY, MDY, IWM, TZA, QQQQ, XLI, TBF, UDN, GLD, DBC, DBA, EFA, EEM, EWA, EWJ, EWY, EWC, EWZ, RSX, EPI & FXI.

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.