Markets didn't seem to know what to make of the major bin Laden headline story. And, financial headline writers struggled to find the right connection to mark the day's news. In the end there isn't any "just right" headline. The image above is from our son who lives next to Ground Zero and perhaps it reflects things best -- somber reflection and rebirth.

There are more shoes to drop from the bin Laden news; perhaps none of it good. We'll just have to wait and see but clearly it's a significant day for Americans.

Markets opened patriotically higher but then sank throughout the day on long-term thinking and pondering "what's next" events. Commodity prices were weaker overall led by declines in precious metals with silver leading the way lower due to increased COMEX margin requirements. This is the kind of volatility you can expect when any market goes parabolic. Gold was lower in tandem with silver but not so severely; oil prices remained sideways; the dollar continues to slide after an early rally; and, BRICs and EMs are battling inflation fears.

Economic data was just okay and earnings results were unremarkable.

Volume remained ultra-light which continues the current pattern. Monday sell-offs lately have seen large swings higher on following days. Breadth per the WSJ was negative.


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

Continue to Currency & Commodity Market ETFs

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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 was a profound day for the world and Americans certainly. And, it was a hard day for trading as well. Perhaps it was just another of those Monday "blahs" that we've seen over the past month or so. Those have been followed by sharp rallies.

Some after hours reports were led by Baxter International (BAX) where shares jumped 19% only to return to earth later. This is another example of a weak dollar leading to profits for multinational companies.

Volume continues to be absurdly light and based on weak fund flow data, this will continue.

Factory Orders and Auto/Truck Sales Tuesday. 

Let's see what happens.

Disclaimer: The ETF Digest maintains active ETF trading portfolio and a wide selection of ETFs away from portfolios in an independent listing. Current positions if any are embedded within charts. Our Lazy & Hedged Lazy Portfolios maintain the follow positions: 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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