Dave’s Daily
by David Fry - June 18th, 2009 9:24 pm
MARKET COMMENT
Dave Fry’s ETF Digest, June 18, 2009
I thought it might be entertaining at least but the show was a bust—a bore—a ramped, camped and dumped deal. Bull’s got excited early with (ho hum) “better than expected” employment data and Leading Economic Indicators. Then financials got a lift from Turbo-Timmy’s testimony.
With quad witching starting you’d think we’d have more volume but there was little. Breadth was positive.
The McClellan Summation Index continues to rollover. Not a bullish for the intermediate term at least.
Let’s be honest; giving the Fed more control over the economy is just handing our economic future to the Primary Dealers (aka, money center banks) and those countries we’re in debt to. It’s scary and upsetting.
There’s nothing wrong with the financial system that couldn’t be cured by putting Glass-Steagall back together again. This would take the banks out of the brokerage business and kick the fox out of the henhouse. But that won’t happen given the entrenched powers that run all things in DC.
I thought we’d have a more entertaining day given news releases and the start of quad witching but, aside from the initial ramp, there was little of interest. The selloff in bond markets was ignored by headline writers for some reason. Their decline may be the reason markets were so constrained today. Tomorrow is another day and that should create more volume if nothing else. And, it looks like bulls jumped on RIMM late driving the price nearly 6 points off the low. This type of action reflects more options expiration nonsense no doubt.
Let’s see what happens.
Disclaimer: Among other issues the ETF Digest maintains positions in: MDY, QQQQ, IWM, GLD, DBC, USL, DBA, DBB, EFA, EEM, EWZ and FXI.
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.
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Dave’s Daily
by David Fry - June 17th, 2009 9:57 pm
MARKET COMMENT
Dave Fry’s ETF Digest, June 17, 2009
Doh!!! Tomorrow is another Treasury auction and to prepare our fearless Fed is buying while our Treasury is selling. How does that work? Two separate sets of books. The former injects reserves into the system by buying Treasury debt and counts it as an (cough) asset. While the latter sells debt which is a responsibility of the taxpayer. It’s that credit/debit deal. Make sense to you? Tony Soprano knows how this works since he cooked the books and got the vig.
Volume remains light and breadth negative to neutral.
The first two charts indicate different time views. The daily NYMO reflects only ultra-short term conditions. In that view we see markets as much oversold. But the intermediate to longer term Summation Index shows a much overbought market rolling over. The latter is a more impressive condition and warning flags are being posted.
Tomorrow’s Treasury auctions will be closely watched. Clearly the government activities are confusing average investors since Money & Banking is a boring and confusing topic. Most people just know there’s a Federal Reserve Board but don’t really understand why it exists or what it does. Even experts that study its activities get confused. Having a central bank with strong (and proposed strengthened) powers has been praised and derided throughout history.
“ If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered.” Thomas Jefferson.
The Summation Index is rolling over, volume remains weak, there isn’t a catalyst in view to drive markets higher and etc. Therefore markets will fade as they’re now doing. The Treasury auctions tomorrow coupled with quad witching on Friday should provide entertainment if nothing else.
Let’s see what happens.
Among other issues the ETF Digest maintains positions in: MDY, IWM, QQQQ, UDN, GLD, DBC, DBB, DBA, USL, EFA, EEM, EWZ and FXI.
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…
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Dave’s Daily
by David Fry - June 16th, 2009 10:01 pm
MARKET COMMENT
Dave Fry’s ETF Digest, June 16, 2009
Bulls got some early cheer from homebuilders but that quickly faded with a (ahem) worse than expected decline in industrial production.
Bulls need a catalyst and a stronger flow of funds to markets. Now it seems many are either just bored with conditions or lack motivation born by an inflow of fresh funds.
Volume remains as light as a slow day in mid-August. Breadth was negative and we’re now short-term oversold while long-term overbought.
The Summation Index is turning over now in a more pronounced way than previously.
As for Transports, the following chart should give you the proper sense of things via the American Trucking Association.
I’m impressed by the turnover of the Summation Index. Perhaps we’re due for something more than a correction. The data has yet to support bullish sentiments. After a move like we’ve had we’re in a “prove it” environment.
There are plenty of charts to chew on and I’ll leave it there. After all, it’s only Tuesday.
Let’s see what happens.
Disclaimer: Among other issues the ETF Digest maintains positions in: MDY, QQQQ, DBC, DBA, USL, DBB, XLE, EFA, EEM, EWA, EWZ, EIS and FXI.
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.
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Dave’s Daily
by David Fry - June 16th, 2009 1:39 am
MARKET COMMENT
Dave Fry’s ETF Digest, June 15, 2009
The only positive from today is Monday’s have proven to be good buying days of late. But that’s the only thing. Clearly some complacency (“the bottom’s in” and etc) combined with light volume (SPY traded only 180 million shares Friday) allowed markets to be pushed higher by those who could do it. Getting sucked in with them has always been the danger as the game often is to dump their accumulated stock to you once you step in.
But, hey, the week’s young and we still have plenty of time left for bulls to pump it while the news may constrain that provided how they spin it. Then there’s that quad witch extravaganza on Friday to keep everyone entertained.
Volume was still light today and breadth…well, it was ugly.
McClellan Summation Index is still overbought but starting to fade.
> 
I’m giving my new computer its first workout. And things are going okay despite delays with installations of various programs. All in all, things seem fast and right. Now if I can only get these markets figured out everything will be perfect.
The current bought of light volume reflects a lack of conviction. We express that with high cash levels running between 70-80%. What positions we take are small reflecting a lack of confidence in markets overall despite some healthy advances overall. The biggest fear is a protracted trading range throughout the summer until we get to the meat of things in the fall. This is how things seem to be playing-out. But, then Mr. Market has his own schedule and my sense of things is as faulty as anyone else.
There’s plenty more to rock markets the rest of this week from tomorrow’s store sales, PPI, Redbook and industrial production. Then Thursday is keyed by jobless claims, Philly Fed, another Treasury auction and Friday’s quad witching. It will be entertaining if nothing else.
Disclaimer: Among other issues the ETF Digest maintains positions in: MDY, IWM, QQQQ, XLE, XLU, GLD, DBC, USL, DBA, DBB, EFA, EEM, EWA, EWZ and FXI.
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…
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Dave’s Daily
by David Fry - June 10th, 2009 6:50 pm
Dave Fry’s ETF Digest, June 10, 2009
President: Mr. Gardner, do you agree with Ben, or do you think that we can stimulate growth through temporary incentives?
[Long pause]
Chance the Garderner: As long as the roots are not severed, all is well. And all will be well in the garden.
President: In the garden.
Chance the Gardner: Yes. In the garden, growth has it seasons. First comes spring and summer, but then we have fall and winter. And then we get spring and summer again.
President: Spring and summer.
Chance the Gardner: Yes.
President: Then fall and winter.
Chance the Gardner: Yes.
Benjamin Rand: I think what our insightful young friend is saying is that we welcome the inevitable seasons of nature, but we’re upset by the seasons of our economy.
Chance the Gardner: Yes! There will be growth in the spring!
Benjamin Rand: Hmm!
Chance the Gardner: Hmm!
President: Hm. Well, Mr. Gardner, I must admit that is one of the most refreshing and optimistic statements I’ve heard in a very, very long time.
[Benjamin Rand applauds]
President: I admire your good, solid sense. That’s precisely what we lack on Capitol Hill.
Then from our leaders at the Fed from their Beige Book report came this:
WASHINGTON (AP) — The economy’s sharp downhill slide eased in the late spring and hopes for future business activity improved, suggesting that the worst of the recession has passed.
A Federal Reserve snapshot of economic conditions issued Wednesday found that five of the Fed’s 12 regions said that the "downward trend is showing signs of moderating."
In addition, "several" regions said that their expectations of future business activity have improved, although they don’t see a "substantial increase" through the end of the year, according to the Fed report. In the last survey, several regions simply noted signs of some stability at low levels.
Altogether, the assessments of businesses on the front lines of the economy appeared to be slightly better than those they provided in the previous report issued in mid-April.”
You know the Titanic’s downward trend ended when in hit bottom.
Some things are just too hard to pass up.
Stocks gapped higher at the open encouraged by the rise in commodity markets until they gave that some second thoughts.
In the meantime the Treasury had bonds to sell and supply is always a negative factor to one degree or another.
And the Summation Index from Decision…
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Dave’s Daily
by David Fry - June 9th, 2009 9:16 pm
MARKET COMMENT
Dave Fry’s ETF Digest, June 9, 2009
Setting up a new computer is a pain that’s for sure. Various components are missing and there are trips to Best Buy who then sell you the wrong part and repeat. This too shall pass. What does this have to do with markets? Absolutely nothing.
It was another light volume day with markets propped and camped from yesterday’s end of day jam. When markets are like this games are easy to play within Da Boyz network. So be careful out there.
We hardly broke 200M shares on SPY which is like a late day in August. It seems most sellers have exited and fresh money is just coming from bonds and TARP funds still sloshing about trading desks. Breadth was very positive on the NASDAQ helped by Texas Instruments earnings and outlook while breadth elsewhere was unremarkable.
The Summation Index reflects severe overbought conditions but that doesn’t mean it can continue for a time.
Holy distraction Batman! Yeah, well we’re going through a lot of crap with Lenovo trying to get our new computer up and running. We now have to return the monitors we purchased recently from Best Buy and spend more money. Also they cancelled the new tower I bought for our programmer two weeks after it was ordered owing to a different delivery address than the credit card. But they never called us even after we authorized the transaction with the bank. My wife’s new laptop is being returned as well. So I’m thinking of that Batman to Robin quote as our son is the one running around Baltimore trying to find the right stuff. An atomic pile might have been easier.
I see this evening National Semiconductor disappointed following Texas Instruments good report last night. Also Intel lost market share in the first quarter. That figures since those are in our new non-operating Lenovos.
Okay, tomorrow’s another day.
Disclaimer: Among other issues the ETF Digest maintains positions in: IEF, TLT, TBT, UDN, GLD, DBC, DBA, EFA and EEM.
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…
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Dave’s Daily
by David Fry - June 8th, 2009 8:08 pm
Dave Fry’s ETF Digest, June 8, 2009
Markets are becoming predictable but still entertaining especially if you’re a spectator. If you have some TARP money sitting on your trading desk with volume this light you can really push things around.
I know, I know, many think the government (the PPT?) is in there buying. This and the previous administration are the most interventionist and scripted I’ve ever seen. But, there’s no evidence this is occurring and they’ll never admit to it anyway. That leaves us with all that liquidity sloshing trading desks needing to play games and/or keep things propped.
Again, courtesy of Decision Point is the chart below containing the McClellan Summation Index which basically accumulates market breadth (advance/decline). With a reading over 1,000, it reflects conditions as “much overbought”.
The internal daily chart below is annotated by DeMark and RSI indicators for QQQQ. Here you can see a 9 count for DeMark and an RSI > 70 meaning short-term oversold. You can see the reaction from the previous DeMark 9 combined with an RSI > 70 in early May. Remember, these are just short-term indications that can help you time your positions more profitably.
That’s a wrap for a market featuring Da Boyz at work. It sometimes is pathetic to watch these trading displays but those can do it. Am I jealous? Sure. Give me some TARP money.
There isn’t much in the way of news based on the calendar this week. Next week is quadruple witching and earnings really don’t start in earnest until after the July 4th holiday. I see Texas Instruments reported good earnings and that will help things along. Perhaps the DJIA will only have tech in it eventually. With market prices at these levels the green shoots gang better prove it with earnings. If those don’t come through then bulls will have been premature. Interest rates rising won’t help the beleaguered housing industry either.
Great news today for the Fryguy—my new computer arrived and this old thing is about to get dumped. The bad news? It didn’t come with all the doodads necessary to make it function as advertised. So, I go from Dell Hell to Lenovo’s unique support circus.
Disclaimer: Among other issues the ETF Digest maintains positions in: IEF, TLT, TBT, UDN, DBC, DBA, EFA, EEM, EWZ and FXI.
The charts and comments are only the author’s view of market activity and aren’t recommendations to buy…
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Dave’s Daily
by David Fry - June 6th, 2009 3:52 am
MARKET COMMENT
Dave Fry’s ETF Digest, June 5, 2009
There was enough confusing data to tame bull and bear alike today. The victims today were commodity bulls, dollar bears and bond holders. Employment data was superficially “better than expected” despite the headline 9.4% unemployment rate. But inside the numbers things were disappointing with revisions and the ongoing games played with the birth/death model. The latter is an official guess of how many folks have given up looking for work. It’s a crude and easily manipulated number.
The bottom line is things still suck as evidenced by the continuing climb in unemployment.
Markets started out like gangbusters but faded quickly given other realities like rising yields, horrible consumer borrowing data and perhaps just a “news selling” opportunity after sharp run-ups.
Volume increased significantly in some sectors while breadth was essentially a push.
As promised I stayed after school today and posted a summary.
The charts reflect bulls are betting heavily a recovery is at hand. This will have to be born out by earnings and job growth. So far we don’t have much of either.
Have a great weekend!
Disclaimer: Among other issues the ETF Digest maintains positions in: IEF, TLT, TBT, UDN, GLD, DBC, DBA, EFA and EEM.
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.
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Dave’s Daily
by David Fry - June 3rd, 2009 8:01 pm
Dave Fry’s ETF Digest, June 3, 2009
Some have predicted a “Zombie Summer” which might be right as investors await proof that a real economic recovery is in the offing. But, just when you thought they might break this camp job they’ve been working on we got the obligatory “stick save” into the close.
Evidently job losses were “worse than expected” and some noted bulls thought the market was expensive which is pretty funny since most of the financial media still report PEs incorrectly. Bloomberg, which should know better, has PEs at 15 for the S&P 500 by using operating earnings which omits unusual items (losses and writedowns?) making stocks look cheaper than they are if just using GAAP trailing earnings. The latter would put PEs at astronomical levels greater than 30. So as things go it’s however TPTB want to spin it.
Volume continues to be light and breadth today was negative.
I usually just post the above chart that measure ultra-short-term conditions. You might find the longer-term “Summation Index” more meaningful. As you can see it’s overbought at over 1000.
The market’s behavior and dishonesty have turned the usually cheery Fryguy into a downright cynic. Whether it’s phony PEs, government data, blatant manipulation, and lying from authorities I can only say we deserve better. Below is an apt summation from another cited blogger regarding the ADP report specifically and current conditions in general.
“The ADP report is supposed to be based on actual reports from private industry.
This pervasive pattern of ‘good numbers’ that result in stock market rallies and the massaging of public opinion, only to be replaced by downward revisions thirty days later, with little notice or quote, is cynical manipulation of the media at best, and a dangerous slide into social engineering by an increasing distortion of ‘reality’ at worst.”
I may not post tomorrow deferring to Friday’s unemployment numbers and reaction to them.
Let’s see what happens next.
Disclaimer: Among other issues the ETF Digest maintains positions in: IEF, TLT, TBT, UDN, GLD, DBC, DBA, EFA and EEM.
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…
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Dave’s Daily
by David Fry - June 2nd, 2009 9:17 pm
MARKET COMMENT
Dave Fry at ETF Digest, June 2, 2009
Sometimes fellow bloggers, subscribers and clients offer the best information. Friday, blogger Kurt Denninger offered his take on Friday’s big time ramp. And, this morning a poster on this blog with the moniker “basehit” hit a home run with his/her note on “why” Friday’s stunning jam job occurred—Wall Street had stock to sell you! Others added to this observation astutely since TARP money needs to be repaid (who knew?) and it will come from the assets of clients. So, Morgan Stanley, American Express and J P Morgan (rumored to have launched the buy programs Friday late) were all dumping stock to the sheeple.
It’s more of the same games being played by those who can do it.
So, now that things were nicely propped and markets tame today, deals got done. There’s nothing like other people’s money right? Sure, I’m a cynical old goat! Who wouldn’t be in this house of games?
Meanwhile let’s move to today’s results. Volume is about the same as we’ve seen these past few weeks—light to moderate. Breadth was basically a push today.
As long as Uncle Sugar keeps the primary dealer network lubed with printed money, Da Boyz will keep things pumped up. Eventually, real earnings from corporations and wages for individuals will have to come through. Then consumers will spend and buy homes. Until then it’s just a game being played by those who can with other people’s money. Sometimes, often lately, I’m embarrassed to be in this business.
Not many people, other than Wall Street honchos getting fat on taxpayer money, like what’s happening. But, we press on.
Disclaimer: Among other issues the ETF Digest maintains positions in: IEF, TLT, TBT, UDN, GLD, DBC, DBA, EFA, and EEM.
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
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
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