Words fail me. That's about all one can say. Jobless Claims came in about as expected, lower than last week, but still trolling the ocean floor. Retailers reported mixed results but no one seemed to care much. Crude oil rallied on a large inventory drawdown. What else was there? Nothing really.

Again volume was light and breadth positive.

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.

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.

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

SPY: Some would describe a day like today as a sucker's rally and a trap. I wouldn't necessarily disagree. But, let's face it, when a market rises on nothing that can be bullish since sellers may be washed-out.

MDY & IWM:  Both Mid and Small-Caps trail the major indexes not by much admittedly but they're not the playground for the HAL 9000s either.


QQQQ & AAPL: Apple had a slightly down day and this is important now that it carries a 20% weight in the ^NDX. I'm going to be writing about this soon and have been in discussions with the NASDAQ about why this situation exists. Since the bulk of the rationale is based on a proprietary methodology, I'll just have to write what I can about it.

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

XLF, GS, MS & KBE: How can there be serious financial reform if the bill gets loaded up with this kind of nonsense well articulated by Real Clear Markets here. Please read their observations and then tell me if legislators are serious or just playing political games and more bureaucrats shuffling papers.

XLB: Alcoa will be the first to report for financials and already some firms have cut their forecasts.

XLY & XRT: Chain store sales basically were "mixed" which is code for disappointing. Let's just say results were better than one year ago when things totally sucked.



IYR: The chase for yield continues but will these REITs pay? That is the question.


IYT & $BDI: Transports are along for the ride while the Baltic Dry Index signals shipping is slow.




IEF & TLT: Mortgage money has never been cheaper. The Fed is floating trial balloons regarding new tactics they might utilize. They chose the Washington Post as their oracle in this article here.

Continue to Currency & Commodity Markets

$USD/DXY & FXE: The euro's on the mend as rigged eurozone bank stress tests are underway. Even with rigging (toxic waste marked to a model) some banks fail like Deutsche Post.


GLD: The grand Pooh-Bahs running the world must be happy that their manipulations are resulting in lower prices for the metal.


DBC: Oil and grains did well today so we got a little lift in DBC.


$WTIC/CRUDE OIL: Low inventories fuel price rise.


XLE & BP: A long time subscriber wrote me a reminder note today regarding BP. He noted correctly that just after the Lockerbie bomber was released from prison for humanitarian reasons, Libya signed lucrative deals with BP. It's no mere coincidence now is it? And, from recent news reports, it has been reported the bomber might live for another 6 years with his condition and not just a few weeks. A corrupt company combined with Gordon Brown's government with influence over the Scottish decision.



DBB: Copper, aluminum and zinc comprise DBB and as these go, so goes materials and economic growth.


DBA: The grains complex rose sharply Thursday on notions the crop would be smaller than first thought. We're also in a weather market period where disruptions in the growing cycle occur. We'll be doing an interview regarding this shortly.


Continue to Overseas & Emerging Markets

EFA: The European markets are responding to liquidity measures from the ECB and a stronger euro. Bank stress tests continue and marking toxic waste to a model vs the market is the key trick to signal all is well.


EEM: Trading ranges at high levels are a pain to deal with for any trend-follower.



EWJ: All markets seem well synchronized.


EWY: Samsung has the flat panel screen market figured out and is making chips for Apple. How can they lose?


EWA: More gains in grains, metals and coal push prices higher especially now that the tax issue is set aside.


EWZ: Brazil is one of the chosen environments for most investors with small caps and various sector issues now becoming available.


EPI: India seems cruising along very nicely in a world of its own and only worried about inflation or a few random acts of violence.


FXI: This ETF has been in a really long trading range (over a year) where we've just churned about.

Continue to Concluding Remarks

As we've always pointed out, they don't put volume data on your monthly brokerage statement. That said, it does matter to folks like me who have witnessed over a year of low volume melt-ups and high volume sell-offs. Recent volume data on the upside has been pathetic. The article from Bloomberg today discussing how discouraged hedge funds are in terms of trading this light volume but volatile market was informative. It demonstrates there's only a few players dominating markets--trading desks armed with cheap taxpayer money and a few algos, both groups using high speed HAL 9000s.

The news doesn't support a rally but that's what we've had the past few days. Perhaps there's something in the future Mr. Market sees that he really likes--great earnings, new Fed actions, an end to oil spill, the war ends...what? We'll find out eventually. If there's nothing, we'll head south once again.

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: none.


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 .