Now that's not a very creative headline is it? I'll bet there are at least a dozen like it; but, there's only so much room for creativity, and besides, who cares. The image says more than words anyway.

Forecasters were working overtime throughout the week lowering estimates for the employment report but even the lowest forecast was too generous. The range of forecasts was between 90-200K new jobs and only 54K was realized. This ended two weeks of awful economic reports. There isn't much to look forward to until earnings season begins in July. Perhaps Fed QE2 operations scheduled to end this month can keep trading desks lubricated enough to prop stocks until earnings season begins. And, Ben was busy Friday with POMO activities with another $7 billion for the Primary Dealers. This may just be ammo for a short squeeze next week with stocks now short-term oversold.

As noted previously, minus the "flash crash" (which could still happen) 2011 resembles 2010 just about perfectly. I'm not too optimistic for the summer but then predictions aren't my thing.

Overall, the "monthly" DeMark 9s, which were finalized in May, forecast current conditions well. They did what they're supposed to do; indicate "trend exhaustion" and so far that's what we're seeing for stocks anyway. A correction or reversal in trend is always possible.

Volume was once again heavy on selling as more stops were hit. A rise early off the lower gap opening may have just been wasted buying power from POMO money as stocks closed about where they began. Breadth per the WSJ was once again quite negative and may have recorded another 10/90 day.

 

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

Continue to Currency & Commodity Market ETFs

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

I never thought I'd live to see the day when the U.S. credit rating would be challenged. But, after wars and entitlement spending the country's going broke and there isn't any serious leadership except games. It's embarrassing and infuriating. Now after all this Keynesian stimulus with have nothing to show for it except a big tab. The best and the brightest aren't running the country, they're ruining the country.

Markets haven't entered a bear market but just working off some excess. There may not be a crash just a long hot summer ahead. We're prepared to short if necessary.

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 www.etfdigest.com .

 
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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