Market internals were weak enough that some of the extreme overbought conditions eased. Nevertheless, it's still a battle between good earnings, the omnipresent and bountiful punchbowl vs lousy economic data. (So, two against one?)

Consumer Confidence data was worse than expected while home prices increased marginally better than expected. But, home prices benefited from the tax credit that expired so many believe prices will decline or go sideways.

Winners today were DuPont, Amgen, Google and Apple but the tone overall seemed tired.

Wednesday, Thursday and Friday will bring more important economic data while earnings will continue to roll-out.

Volume did increase Tuesday but breadth was weak since with markets overbought some profit-taking was expected.

SPY: Before we can get involved the weekly charts must lead the way and thus far there isn't a buy or sell message.

MDY & IWM: Both Mid and Small-Caps showed some tentativeness Tuesday with poor Consumer Confidence data.



QQQQ: A good day for heavyweight Apple still leave the QQQQ's trailing their peers some.

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

SMH & SNDK: SanDisk is putting on a nice show after selling off sharply the previous three weeks and now up 5% on the week. It's sporting a pretty nice trend.


XLF: Financials have been strong this week with Citigroup leading the way higher despite government pronouncements that they'll be selling. I guess that will clear out some overhead supply so we rally. Shouldn't it rally "after" the sale?  Just wondering.



XLV, BIIB, AMGN, CEPH & IBB: Biotech is on a roll at the moment but as you can see by the chart immediately above the ETF has backed-away at resistance. Let's see if it can breakthrough.

DD & XLB: Leading materials higher is heavyweight DD which beat expectations and offered good guidance.

XLY & XRT: You can assume, I'm not a fan of these two consumer oriented ETFs since I just don't believe consumers are spending--rather, I think they're spent.


IYR: There really isn't much in the way of good news other than the tape which shouldn't be dismissed. But, released today was poor vacancy rates which isn't a good thing for cash-flow for debt laden REITs.


IYT: A day after FedEx we sell-off.

IEF & TLT: It was a strange day with long bonds fading but commodity prices falling at the same time.

Continue to Currency & Commodity Markets

$USD/DXY, FXE, ULE & FXY: The euro tagged 130 Thursday but then fell back some while the yen is under pressure from ongoing intervention threats.



GLD: Forgive me if I cry "FOUL"! This is the kind of nonsense, or if authorities were doing their jobs, would qualify as criminal manipulation in options as traders there do their best to nail the unsuspecting. It's a dirty and crooked game to deal in options with these guys. Stay away from it is my advice.


DBC: Heavily weighted by energy is the reason for declines on Tuesday.


$WTIC/CRUDE OIL & XLE: Not much positive action on Tuesday and XLE is a mess anyway.



DBB: Base metals slow their ascent as resistance lies overhead.



XME: Knocked back lower with precious metals markets today.


DBA: Talk of a Russian grain embargo at least for wheat got markets excited early but then nothing came of those.


Continue to Overseas & Emerging Markets

EFA: Gotta love those "stress tests"!


EEM: At resistance on the button. A slowdown in commodities Tuesday kept a lid on things.


EWJ: Japan markets are pretty dull.


EWY: We protect them and buy their stuff. What do they do for us I wonder?


EWA: A mixed day in base metals and other commodities holds back Australia Tuesday.


EWC: Same story here with commodities weak so too is Canada.


EWZ: Brazilian markets tentative with commodity markets.

EWG: I'll randomly add Germany which is the European leader at the moment.


RSX: Russian markets are moving along with commodities but hit a speed bump Tuesday. Rumors were about of some sort of grain embargo but nothing's come of it yet.


EPI: Raising interest rates more than expected put a damper on things for India.


FXI: Most Chinese markets down Tuesday as bulls try to decide what the government's next move is regarding monetary policy.


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 Concluding Remarks

Markets on Tuesday took a breather even though volume increased. Nevertheless, this is the same pattern we've experienced over the past few months--light volume rallies and heavier volume declines.

There wasn't much to headline other than the poor market-making and activities going on with precious metals options expiration. If the CFTC had any care they'd be investigating manipulation and other illegal activities at this gambling pit. What happens in these markets would make a three-card Monty dealer blush.

Boeing will open earnings on Wednesday along with Canadian Pacific, Comcast, General Dynamics, Newmont Mining and after the close a bunch of others including Visa.

There will also be plenty of economic data including Durable Goods and the Fed's Beige Book in the afternoon.

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: GLD, UDN and ULE.


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 .


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