MARKET COMMENT
Dave Fry’s ETF Digest, May 4, 2009
Those of us who are long, and/or were dragged into positions kicking and screaming, just have to accept the fact you can’t fight the tape or more powerful forces exceeding your own basic logic. So am I, or are we, weak minded? Maybe, but I’d say we’re just systematic.
The market reminds me greatly of May 2003 when a rally began in earnest off what really were double bottoms of October 2002 and March 2003. Then, as now, a rally was fueled by low interest rates, money printing and the start of a new bubble this one in housing. As we’ve often stated, politicians and the officials they pressure will always choose inflation over making hard choices. It’s the Achilles Heel of democracy where short-term performance is rewarded at the ballot box since the Sheeple don’t understand or want other alternatives.
The quote of the day comes from the tax cheat in chief, and man, does this take some hubris!
"We will eliminate indefensible tax breaks and loopholes which allow some companies and some well-off citizens to evade the rules that the rest of America lives by."
Turbo Tax Tim Geithner
Alright, as my son’s generation would say: “Dude, where’s the volume?” The equity market remains in the hands of trading desks and hedge funds. But, this just makes me more suspicious than anything. They don’t put volume data on your monthly performance or brokerage statement. And, what the hell, we’re making money, right?
Breadth was very positive but volume has become a challenge to derive. Look at the NASDAQ for example and it’s confusing and incorrect obviously.
I can best just volume by looking at ETF trading and below is SPY which is my customary way to begin summarizing the day’s action.
Looking deeper we need to review the other major index ETFs (MDY, IWM and QQQQ) and we can now do this from weekly chart views since enough time has passed to allow for intelligent estimates of support and resistance areas.
I can’t wait for the new website redesign to be complete so I can start intra-day short-term trading commentaries on these leveraged ETFs like Direxion and ProShares.
Which one is your Chucky? Does Crammer have a sequel in him too?
So many markets, so little time. Plus the movers have taken my PC with multiple monitors which make this task so much easier. I’m willing as always to post other markets as long as the primary markets of importance, from my view, isn’t sacrificed. So again, if you have markets you want featured let the Fryguy know at: dave@etfdigest.com.
Do I like this market as folks wonder? No I don’t. This Geithner fellow can get me pretty mad. It still seems like a setup by Da Boyz to suck us in and sell us their accumulated shares. But, here’s the bottom line: if you’re systematic and disciplined you must follow your system or you’re lost. The only “tell” I have that this is a sucker play is light volume. Now I did read that volume was “comparatively heavy” today, but I don’t see that in the ETFs despite the run up in prices.
Like I mentioned to subscribers over the weekend, it’s no coincidence that everyday this week Fed officials will be speaking. They’ve no doubt rehearsed their talking points and will jawbone markets.
Let’s see what happens.
Disclaimer: Among other issues the ETF Digest maintains positions in: SPY, MDY, MVV, IWM, UWM, QQQQ, IGM, FDN, XLB, XLY, XLI, IYR, NLR, XLU, IEF, TLT, TBT, FXA, DBC, USL, XLE, DBA, MOO, DBB, XME, EFA, EEM, ILF, IEV, EWJ, EWY, EWM, EWH, EWA, FXI, IFN and EWZ.
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.
