The IMF (close Goldman Sachs ( GS) associations) lowered global economic growth expectations perhaps lowering demand for commodities; Fed Governor Dudley (ex-GS) pronounced inflation as "transitory"; rumors swirled the CFTC (Chairman Gensler ex-GS) would raise margin requirements on energy and, "presto"! Goldman Sachs told clients to close long commodity tracking positions. That's the power GS has with ex-employees planted like moles throughout the industry. 

Whether you believe it or not, the bear raid on most commodities and commodity related sectors took a hit today. Goldman will report its gains based on "when" they uttered their call and not on your ability to execute and transaction.

Alcoa ( AA) just kicked-off the earnings season after the bell and results were mixed. There is some selling in After Hours trading.

Bonds rallied with a small uptick in the dollar, commodity selling and weaker stocks overall.

Volume remains pathetically light and one must wonder where everybody is or if this is now the "new normal" for trading. Breadth per the WSJ was negative overall.

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The chart below is courtesy of our trading associate Scott Pluschau and is comments are as follows:

Prior to today the S&P futures contract has had six consecutive days of topping tails looking at Japanese Candlesticks for the daily price action, highlighted by a blue rectangle on the attached chart.  This is a clear sign of upside price rejection. An increase in demand or an exhaustion of the supply in this area, and due to the length of sideways movement we may see a strong breakout to the upside, as those who are on the short side will likely feel the pressure to cover their losses quickly, while the higher price above resistance may also attract further long speculation.

Volume on the Emini's has been below average the past two day's as we have made a set of lower lows and negative price action at the end of the day from the prior close, so I am not overly bearish at this time either.

The last minor resistance level was around 1315 on March 25 and March 28, 2011, highlighted with a grey trendline. This is an important area to see hold for the bulls in my opinion.  Using Auction Market Principles I think the S&P is forming a mature balance area, or is in a Horizontal Development phase establishing value, and it will be very important to pay close attention to the volume, if and when the price breaks out from this range to the upside or breaks down below 1315.

I believe the market is likely to enter a phase of strong vertical development seeking new value soon.

Continue to U.S. Sector ETFs, Stocks & Bonds

Continue to Currency & Commodity Markets

Continue to Overseas Sectors & 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

It's always suspicious that officialdom is infected by ex-GS officers especially when many in a policy making position have political interests. Maybe that's just me.

The weak volume remains an enigma for most technicians. Even on Monday's sell-off volume was weak contradicting previous selling days. We don't maintain too many U.S. positions but are more heavily invested internationally and in commodity sectors. This wasn't a great day for us for our positions.

Alcoa's earnings report wasn't well received with the shares down over 3% in late trading. The company always has many unique write-downs and other adjustments with every earnings report it seems.

This is going to be an action-packed week with earnings, Retail Sales, CPI/PPI, energy inventories, MENA Middle East and North Africa concerns and so forth.

Let's see what happens.


Disclaimer: Among other issues the ETF Digest maintains positions in: IWM, PST, UDN, GLD, DGP, USL, UCO,  SLV, VT, MGV, BND, BSV, VGT, VWO, VNO, IAU, DJCI, DJP, VMBS, VIG, ILF, EWA, IEV, EWC, EWJ, EWG, EWU, BWD, GXG, THD, AFK, BRAQ, CHIQ, 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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