The large gap opening lower was fully expected given the situation globally and especially in Europe. The German stock market has fallen over 8% in the past week and is in bear market territory. (You might just change the names of the characters in the lead image to "Hanz & Franz".) Clearly there's a lot going across the pond. Greek two-year notes hit 89% Tuesday making a default certain. The Bernank chimed-in stating a Greek default was "manageable" -- meaning between he and Jean Claude they have plenty of paper and ink to take care of things with (cough) the exception of contagion. Oh, but that reminds me Italy made for negative headlines most of the day.

The big news early was the Swiss National Bank (SNB) threw in the towel on more conventional currency debasement strategies and decided to peg the franc to the euro at 120. This means they'll be printing a lot of francs to buy euros to make it all work. This initially threw gold for a loop which had been making fresh highs. After falling on the SNB news, gold rallied back to nearly unchanged only to fall again in the U.S. on profit-taking and a rising dollar. We closed our gold positions at the opening based on more DeMark readings. (Yeah, it's funny how these work sometimes, if only temporarily.)

Economic data from the ISM Services Sector was better than expected at 53.3 versus 51 expected. However, inside the numbers orders were weak and comments negative which didn't help stocks much.

Stocks were weak overall but came well off their lows around mid-day as HFTs entered and launched buy programs. Bulls in the financial media will ignore this and only complain when they're active on the downside.

Bonds were well bid once again, the dollar was higher overall and commodities were mixed at best.

Volume remains high while breadth per the WSJ remains negative as perhaps we're getting short-term oversold.

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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

Conditions continue to deteriorate even with some late day buying. You're seeing some strange behavior now with indicators--a sharply rising VIX while others remain in neutral or even ascend. The news flow remains highly negative and fund managers have reinvestment money to put to work; hence some buying off the lows on Tuesday.

There is little more to make of things. The president's jobs speech on Thursday will be political but a non-market event. Many are waiting what Bernanke & Co will do on the 21 st which may provide a lift or not. It's hard to go to the well too often since QE2 was a failed moon shot in the final analysis.

Wednesday will feature the Beige Book released at 2 PM. Remember back in February Bernanke stated with certainty the economy was building steam for a "durable" recovery. They count on us to have short-memories.

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, EUM, EFZ, VT, MGV, BND, BSV, VGT, VWO, VNO, IAU, DJCI, DJP, VMBS, VIG, ILF, EWA, IEV, EWC, EWJ, EWG, EWU, EWD, 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.