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.

April 13, 2010

PROPPING CONTINUES

These "prop jobs" are becoming a daily "in your face" activity plain for all to see; but more importantly, we're basically long so why complain?

Alcoa's earnings were a miss. That dragged down global equities fearful that economic growth via demand for materials would suffer. But, Alcoa always reports funky earnings numbers replete with write-downs and all manner of unique quarterly mumbo-jumbo.

For the most part, markets marked time waiting for results from Intel, Linear Tech and CSX Corp among others. After the bell, earnings from all three beat estimates handily.  

Again, volume was light perhaps in advance of the first round of earnings news as investors wait to commit.  Breadth was basically flat.

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.

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.

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

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

Continue to Currency & Commodity Markets

Continue to Overseas & Emerging Markets

Continue to Concluding Remarks

Markets paused today digesting Alcoa's disappointing report but Da Boyz kept things well-propped into the close. And, it may be they had things right based on earnings reports from Intel, Linear Technology and CSX Corp.  You suppose these guys knew something before the rest of us? That would be shocking...snicker. Below is the extended trading session at of 6 PM EDT.

Like I said at the start, "why should I complain since we're long?" Yes indeed.  But, you can glean from cynical comments I'm not too pleased with these light volume markets.  If retail should start selling bonds and buying stocks willy-nilly then you should look for the exits.

Wednesday will feature more earnings led by JP Morgan and after the close, JB Hunt and YUM! Brands.   Retail Sales, Business Inventories, Crude Inventories and the Fed's Beige Book also will be front and center.  Taken together, these are all market movers.

Don't forget options expiration is Friday.  Can you believe it's already the third Friday in April? 

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: MDY, IWM, QQQQ, USD, XLY, XLF, XLY, IYR, KBE, DGP, UUP, DBB, BDD, EFA, DZK, EEM, EWJ, EWY, EWA, 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 .

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