The above image displays quotes per second coming from HFT (High Frequency Trading) systems. The two graphs display action towards the close of trading Friday. The upper graph shows action of "algos" per second while the bottom the number of HFT quotes per second over a three-minute time period with colors for each exchange. The lower graph displayed nearly 300 quotes per second -- got that? Perhaps only a small fraction of these are real trades with the others being just bids and offers designed to stimulate program trading algorithms. This is posted because nearly 70% of all volume and trades on the NYSE, for example, are program trades with HFTs now dominant. The above comes courtesy of HFT Alert which is a program investors may purchase to monitor this activity. Their homepage is HERE and we'll be doing a two-part video podcast with them next week which should explain how all this works, why you should care and perhaps how you can use it.

HFT action may be away from the news of the day. So let's get to it.

Stocks rallied sharply marking three straight weeks of gains. Much of the gains stemmed from earnings, hopes for a euro fix and late comments from Janet Yellen.

Earnings news continued to flow Friday with good results from fast food outlets McDonalds (MCD) which was helped by stronger sales in Europe boosted by the euro and Chipotle (CMG) whose stock soared 8%.  I guess fast food is the big deal now which strikes me as an odd reason to rally stocks overall. Perhaps people find it cheaper to buy and eat junk food than cook in their McMansions. Mostly panned were earnings from General Electric (GE) as their core utility business had slowed and Microsoft (MSFT) which seems just a utility-like company. But, strong earnings and stock price gains were reported from some tech companies like SanDisk (SNDK), Altera (ALTR) and Seagate (STX).

European optimism sprang from hopes the EU would save itself if for no other reason than because it must. The weekend features serious meetings to structure a working plan (again...sigh) which we're told should lead to a vote on Wednesday. There are enough stories and rumors that are positive and negative. Even the most positive rumor leaves a "fix" with a $1 trillion shortfall. Will the IMF and U.S. fill the void? Good grief!!

Late in the trading day the Fed threw more gas on the bulls' fire with Fed Vice-Chairman Janet Yellen discussing the possibilities of QE3 if the economy doesn't perk-up. This would be controversial while reinforcing how all-in the Fed is with its Keynesian policies. It's that if at first you don't succeed, try, try, and try...again policy since they have nothing else. QE2 accomplished what? A phony stock market rally which pleased the Fed but once ended reality hit home as the safety net was removed.

Gold rallied to recover most of the losses from previous sessions as the dollar weakened once again in anticipation of an EU fix. The Japanese yen rose to record high and the BOJ won't like this one bit. As stocks rose naturally bonds fell and commodity prices rose.

Volume was about average for recent trading periods and breadth per the WSJ was quite positive.

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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

The VIX is showing investors still want protection from a poor euro zone outcome by buying puts. At the same time the NYSI is rising showing accumulation no matter that most retail investors continue to flee markets. Lastly the NYMO shows we're short term overbought once again making a few round trips just this week.

The rally in the euro recently may be due to France and others repatriating monies to assist with bailout funding and rescues, at least some thoughtful people think so.

So we enter the weekend with the euro zone squarely on everyone's news screen. It all seems quite bizarre but that's world today.

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: QQQ, XLY, XLK, IGV, 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.

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