It's not like the end of the world just yet and maybe our friend above will get a favorable lift of air. Friday's end of day options expiration ramp was misleading and wasted some buying power not that there's much of that anyway. The late day "stick save" today may be just an indication of sellers running out of gas. Most investment dollars are tied up in funds anyway and equity outflows still remain.

The Kabuki Dance is still going on in Washington and both sides seem determined in their positions for now. European debt and stress for banks are still dominant and more Italian bank stocks and bonds were savaged Monday.

More earnings news is set to hit the news ticker with IBM (breaking: earnings beat estimates by 6 cents) up and then all eyes on Apple ( AAPL) tomorrow. Bank of America ( BAC) and Citigroup ( C) shares were leading the financial sector lower. And, as we've been saying now for weeks, the overall market can't rally without financials at least in the same trend.

Late breaking news is Cisco ( CSCO) will cut 6,500 jobs ( now they say 11,500). Also Borders announced the closure of 399 stores and petitioned the judge to liquidate the company which should negatively affect some REITs ( VNQ, IYR and etc). What an amazing boom and bust story!

Gold ( GLD) advanced to new record highs and was followed higher by silver ( SLV) while the dollar rallied slightly. The rumor remains the Chinese central bank is a big buyer of euros looking to backstop their long positions. In the meantime, bonds were mostly flat on the day with U.S. bond ( IEF) investors hesitant over debt talks.

Volume remains somewhat higher than recent averages and breadth per the WSJ was quite negative.

 

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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

In the 80s we all stood around at Blockbuster to get the latest movie release. Then that failed. In the 90s the hip thing to do was to go to Borders drink coffee and read books in an easy chair. Now that's failed. Both are the result of improvements in technology. The next thing to go will be movie complexes which you can now more comfortably and cheaply do at home. All this has a negative effect on REITs and is why paying attention to new technologies is so important when investing in the sector.

That's an aside which has little to do with today's action. If you're bullish you'll have to go with the big names now and avoid most of the rest.

Things feel very fragile and at times scary. I've seen these things before with the Hunt crisis in the 70s, the stock market crash in 87, the Long-Term Capital collapse in the 90s, dotcom and housing bubble and subsequent financial panic. Does this climate feel any different? It does sort of since we've never seen a situation where the U.S. is in such a precarious position as a country.

Good earnings reports can be a shot in the arm for bulls especially if the debt crisis is resolved and markets become oversold. Retail investors don't trust markets unfortunately and it's easy to understand why given market manipulations. Demographics aren't as favorable in the U.S. for much equity investing as in the 80s and 90s. We'll have to rely on overseas investors to buy our stocks and perhaps they'll be nice enough to let us buy some of their stocks when the time is right.

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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