MARKET COMMENT
Dave Fry at ETF Digest, April 15, 2009
Some talking heads were cheering the Fed’s Beige Book which offered a “glimmer” of hope that the worst was over and we’ve bottomed. More likely it was more pumping of financials led by JPM in anticipation of stronger than expected (who knew?) earnings.
Look, the bulls still are in control and they’ll latch-on to whatever works for them. Just remember with volume where it’s been and trading desks (Goldman Sachs et al) awash in liquidity what else is there for them to do—lend it? Nope, they’ll trade markets with our money. It’s that simple and if you’re a trend follower you just have to go with it despite the associated disgust.
Volume was better but it’s still subpar. Breadth was quite mixed with the NASDAQ hurt by INTC, MSFT and CSCO. It’s about the banks man!
The market decline was led by financials and the toxic mortgage assets. With these safely hidden or in remission like cancer, and massive amounts of liquidity pumped into the financial system we’re heading higher. However, Main Street still isn’t in the mood to play. This rally is the result of massive amounts of liquidity now available to trading desks. They and hedge funds are picking each other’s pockets launching program buying and selective short squeezes.
Until people start funding their accounts this rally shouldn’t last too long. If retail investors start putting money to work in mutual funds, retirement plans and so forth then the rally can gain more traction. Until then it’s just a game played by Da Boyz.
Google reports and that should carry some weight.
Let’s see what happens.
Disclaimer: Among other issues the ETF Digest maintains positions in: SPY, MDY, IWM, QQQQ, FDN, XLB, XLF, XLI, XLY, IYR, DBV, DBC, DBA, DBB, USL, MOO, EFA, EEM, ILF, EWH, EWM, EWA, EWZ, IFN 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.
