Markets Ran Out of Gas: Dave's Daily

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 26, 2010

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MARKETS RAN OUT OF GAS

I could make this pretty short but being skimpy isn't why they pay me the big bucks. Nevertheless, the image above basically sums up the last two days of trading don't you think? Maybe it's just profit-taking or the need for more fuel from earnings news starting again next week to give bulls what they need. Or, perhaps bad things can happen over the weekend, oh I don't know: how about a war on the Korean peninsula?  Was that ship sunk by the North or just having its own accident? The latest news is sketchy and any North Korea role is being played-down.

For those interested in leveraged ETFs we completed an interesting broadcast with Andy O'Rourke, Sr. VP Marketing for Direxion Funds.  You may view the video without registration or subscription at this link on our commentary page.   I believe it's informative.

News on Friday was mixed with GDP data revised lower and Consumer Sentiment about as expected. This didn't give bulls much to jump on except ongoing rallies in retail and financial sectors. The dollar fell with news of the 100 th different Greek bailout allowing commodities, like gold, to reverse course and move somewhat higher. Bonds were able to regain some lost ground after suffering mightily from previous poorly received auctions.

Volume was a little heavier than recent averages and from the 5 minute chart below you can clearly see a failed rally followed by distribution. Breadth was flat per WSJ below.

 

Continue to Major U.S. Markets

There isn't too much to take away from Thursday and Friday trading.  Bulls seem tired and who can blame them. Once again, it's important to remember we're approaching the quarter-end and many have a vested interest in keeping things camped at high levels as bonuses are on the line. Perhaps the South Korean ship sinking rattled stocks today and North Korean involvement now is being played down.

Next week we'll have the usual assortment of data ending with the employment data on Friday as featured by Briefing.com. This should be an interesting week ahead, but aren't they all?

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: IWM, MDY, VTI, QQQQ, XLF, XLI, XLY, IYR, TBT, and UUP.

 

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 .

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