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Dave’s Daily

MARKET COMMENT

Dave Fry’s ETF Digest, September 1, 2009

stock market time bomb

You could feel it coming. The other day my image du jour was “running on empty” and that was the ominous warning we were sensing. Most trading systems don’t have a “feel” component and mine doesn’t either. The only logical thing which we’ve commented on repeatedly as have others is light volume and how the news hasn’t jived with reality. And, recently, investors have been selling good news versus buying bad news as before. Today good ISM and housing data failed to impress as the short sellers seized the tape. September’s are supposed to be the cruelest month but it’s never a sure thing.

Today, hedge fund leaders Paul Tudor Jones and others jumped on the short side questioning the validity and viability of the current rally as reported well in this Bloomberg story. They’ve thrown down the gauntlet to Goldman Sachs and Morgan Stanley to prove that the economic recovery and market rally are for real. We’ll see who’s right ultimately but today they had the tape finding a lot of stops to hit. It was definitely their plan and was successfully orchestrated.

Volume increased substantially as stops were deliberately targeted and hit. The signature of this market has been (apart from Fed and options expiration days) heavier volume on down days than on up days which is a negative. Breadth was decidedly negative but not quite a 10/90 down day. 

 
 

 
 

More Dave’s Daily here.>>

 

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