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I guess "all's well that ends well" would be as good a comment. That said, we still had another negative week. But, you could've taken the week off and returned only to wonder what the big deal was. TPTB the powers that be had another field day manipulating markets on the back of little positive from news.

Much of Friday's rally was attributable to higher Retail Sales at .5% vs .1% the previous month. However, this report not only missed consensus at .6% and is mostly made up of higher prices from gasoline sales (it's the driving season) and car sales. You know it's really easy to qualify for a car loan versus a mortgage. Other news was quite poor with Consumer Sentiment at 54 vs 63 expected and Business Inventories at .3 versus .6 expected. So Retail Sales are higher but Consumer Sentiment is in the toilet and this is a positive? Riddle me that!

Again TPTB are busy still managing things their way whether it's higher margins on gold to short sale bans on many European banks.

Just because some could pull it off, stocks closed Friday higher wiping out severe losses from earlier in the week. What is on the minds of bulls is hoped for prospect of QE3 and that's all I can see. HFTs and hedge funds are firmly in control of things and don't discount any sneaky moves in markets by the Fed and Treasury. With this activist and interventionist group running the show both in the U.S. and Europe anything is possible.

Stocks rose, commodity prices were lower overall, the dollar was flat and bonds were stronger. Stocks as measured by the SPY lost 1.50% on the week which isn't bad considering the "pick any day" action.

Volume was heavy by three-month averages but much lighter by half this week's averages. Breadth as measured by the WSJ was positive and we're no longer short-term at least oversold.

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The Magnificent Seven and one Dwarf.

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

Economic data over the week and the past two days was unremarkable to poor. Yet we rallied Thursday. Why? Because we were oversold going into the day. Friday's rally was based loosely on Retail Sales which were unremarkable as well. Disregarded completely was poor economic data for Business Inventories and dreadful for Consumer Sentiment. The latter were ignored completely. Why? You tell me since HFTs don't give a rip about fundamentals. Further what bulls are out there must believe with poor data QE3 is all but a certainty.

Next week is more economic data featuring Empire State Mfg Survey (Monday), Housing Starts and Industrial Production (Tuesday), PPI (Wednesday), and Jobless Claims, Existing Home Sales and Philly Fed (Thursday). More earnings reports will come with most centered on retailers.

Let's see what happens.

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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.