Evidently central banks, including our own no doubt, like a weak dollar. So with markets on edge, central banks stepped-in with rumors of intervention against the rising dollar. This led to a reversal in stocks as a weak dollar has been supportive to U.S. stocks. (This, ladies and gentlemen, is done while articulating a strong dollar policy.) But, stocks were oversold anyway so a rally was due as we suggested Wednesday. Let's not forget quad-witching is at hand Friday to put a bow on a volatile week.

The 3 PM rally in stocks occurred just after rumors rallied the euro. You see the banksters don't really have to do anything just float the idea.

Overall economic news continues to be dreadful. While Jobless Claims improved somewhat the data shows they're still quite high. The Housing Data, while an improvement, was still not robust especially considering the season and interest rates. But the worst data was the Philly Fed report which printed at -7.7 vs expected readings of 9.0. It's been said this is the worst 3 month drop " ever" in that index.

Commodities were stable while bonds were mostly unchanged.

Meanwhile the Fed keeps chucking the POMO in there and this is building on the trading desks of Primary Dealers. A note of caution to bears; beware the double POMO action slated for Monday.

"Getting out while the getting's good", was the battle cry for insiders at Pandora (P). Its IPO came to market at $16, hit $26 and closed underwater at $13.26. This is sort of like the aftermath of LNKD ($68) and GM ($28.50).

Stocks did find their mojo with the euro rally and joined the party. Volume for the day was heavy but breadth remains negative which enhances some oversold conditions heading into quad-witching.

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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

Markets are still oversold. Also on tap is the Mich. Consumer Sentiment which is probably the least reliable indicator available beyond the "core" inflation rate. The big event Friday is quad-witching and for most folks it is and should be just a spectator sport. We'll just watch ourselves.

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: SH, PSQ, 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.