Investors Contemplate Next Move: Dave's Daily

 

Upon further reflection most know Wednesday's central bank action was just a handout to buy time. Both Barclay's and Goldman Sachs didn't think highly of the bullish reaction to yesterday's news. Barclay's Paul Robinson said the market updraft was "exaggerated" and "not easy to make the case that the magnitude of the news quite justifies the magnitude of the global market reaction." He continued: " Market participants seem as fearful of missing a market updraft as they are of getting caught in a downdraft." Goldman sounded a more ominous tone by stating: " Although there is the obvious counter: why act now - is there something lurking around the corner? Those are worries for tomorrow though."

By Thursday, investors are sober knowing that the Fed, along with a few other players, gave interest free handouts and the solution to the eurozone's problems have been postponed for awhile. Much of the optimism for a solution comes from those knowing that a common political union is the answer while at the same time it seems unlikely to occur.

Jobless Claims were disappointing as they surged once again beyond 400K (402K vs 393K expected) but it's interesting how consistently previous data is revised higher as shown below:

 U.S. ISM Mfg Data was more positive (52.7 vs 51.8 expected) which shows more economic growth. However, while U.S. data is improving the rest of the world is contracting as the chart below demonstrates.

 

 

And, other recent global economic surveys demonstrate global weakness as shown in the November PMI Survey below:

 

 

Stocks vacillated between gains and losses most of Thursday as most financials continued as a drag while other sectors were better like tech. Bonds were flat, the dollar was mostly unchanged and commodities were mixed.

 

Volume was quite light on Thursday as perhaps traders decided to reflect more on the news and try to digest previous gains. Breadth per the WSJ was mixed to negative. 

 

 

You can follow our pithy comments on twitter and join the conversation with me on facebook.

 

 

 

 

 

 

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 news cycle will continue to generate plenty of unexpected surprises. Friday presents us with the monthly payrolls report from the Labor Department. Current estimates are for 130K new jobs; however, using the chart below you might expect a report showing over 200K based on the relationship of ADP to NFP data.

 

 

 

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, 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 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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