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 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.
