No one wanted to hold stocks, particularly those related to North Africa or the Middle East, over the weekend. The situation in Egypt is moving like rapid firestorm through the region. U.S. diplomats and leaders are unprepared to deal with it. Vice President Biden stated, "Mubarak is no dictator" while their jails are full of dissidents. I guess he's just "our" dictator. Hillary Clinton has taken two positions on two successive days, the first being Murbarak is our "useful idiot" and the next "he needs to make changes."

Why should we care? Because North Africa and the Middle East is a powder keg, and the only reason we're involved is we have NO energy policy. So we need all these countries as allies since we won't do ANYTHING to become self-sufficient. This has been going on for 40 years.   


That's my little rant for the day.

Meanwhile, despite the sharp selloff, bulls are quick to remind us that January is still up 1.5% even though Monday could wipe that out quickly if things don't settle down.

Many pundits were pumping stocks all day as if nothing was going on but that's what they're paid to do.

Economic data was mixed with a disappointing GDP report (3.2% vs 3.8% consensus) and the Michigan Consumer Sentiment data ticked higher helped much by rising stock prices which weight that report.

Earnings news was positive overall but there were some prominent losers (F & AMZN) missing estimates.

Commodity prices rallied sharply with news from Egypt with higher oil prices on fears of some interruption in traffic on the Suez Canal. Gold prices also sharply reversed course spiking higher on the news while the dollar rallied. Bonds were also higher in the typical flight to safety mode.

Once again on selloffs, volume explodes higher as stops get hit. Breadth per the WSJ was decidedly negative.


Continue to U.S. Sectors, Stocks & Bonds

Continue to Currency & Commodity Markets

Continue to Overseas Markets & ETFs

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

As a technician using DeMark counts among other indicators it always amazes me how accurate they can be in indicating "trend exhaustion" if only for a short-term. Many times the weekly 9 counts can even indicate a reversal. We have DeMark weekly 9s in just about every major US index. Momentum, aided primarily by POMO and secondarily by earnings, has been strong overwhelming many technical indicators including DeMark which showed 9s earlier in January. Now we're back to those levels.

If the situation in Egypt settles down perhaps stock buying can resume especially since overbought conditions eased. Monday will tell the tale.

Enjoy your weekend.

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: VT, MGV, BND, BSV, VGT, VWO, VNO, IAU, DJCI, DJP, VMBS, VIG, TBF, ILF, EWA, EWC, EWJ, EWG, EWU, BWD, GXG, THD, AFK, BRAQ, CHIIQ, TUR, & VNM


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 .

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Dave Fry is founder and publisher of ETF Digest, Dave's Daily blog and the best-selling book author of Create Your Own ETF Hedge Fund, A DIY Strategy for Private Wealth Management, published by Wiley Finance in 2008. A detailed bio is here: Dave Fry.

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