Dave's Daily By Dave Fry, founder and publisher of ETF Digest and author of the best-selling book Create Your Own ETF Hedge Fund. March 1, 2010 SPINNING ECONOMIC DATA The economic data that rolled out Monday mostly missed expectations, so it was surprising to see headlines stating how bullish the data was. You have to hand it to the financial media for turning uninspiring data into bullish news. Personal income was only up .1% vs .4% expected while spending was .5% vs .4% expected meaning consumers were outspending income--nothing new there. Core PCE Prices were unchanged, only if you didn't drive or eat. Construction Spending was lower and was the ISM (Manufacturing) data. So what are we seeing here? The big news was the notion that M&A activity would increase (witness AIG deal) and much Small-Caps (IWM) would be the beneficiary as big firms gobble up smaller ones. Volume was light which has been an ongoing trait of rallies lately. Breadth was quite positive. Continue to Major U.S. Markets
Some see less than expected reports as bullish and since they are in control currently you'll have to respect the tape action. It's been very hard for many, including myself, to understand current market behavior based on the drumbeat of poor overall news. The overriding bullish news remains the Fed, monetary policy and little else. Someday it will come a cropper but for now bulls are making hay while the sun shines. Stay out of their way. Not much on tap from economic data Tuesday so bulls will have to think up something. Let's see what happens. You can follow our pithy comments on twitter and become a fan of ETF Digest on facebook. Disclaimer: Among other issues the ETF Digest maintains positions in: UUP & IBB. 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 .