Markets Surprise- Weaker In Trading Range
0
May 05, 2015

Sign up to become a premium member of the ETF Digest and receive more of our detailed charts with actionable alerts.

You can follow our pithy comments on twitter and like us on facebook.

It seems bad news may be bad after all, um, at least for Tuesday.

Economic data revealed the Trade Deficit soared to what’s said the highest on record at $-51.4B vs $-42B expected & prior $-35.9B.

That led some to suggest QE4 might not be too far away.

The PMI Non-Mfg Index was modestly weaker while the ISM non-Mfg Index was slightly higher—they cancel each other out.

The Gallup Economic Confidence Survey slid to -9 vs -2 previously—that was another dud of a report. Then there’s Greece again—need I say more?

The question becomes: Are we topping out? Or, is the trading range merely continuing? Is it sell in May and go away once more? Or another dip buying opportunity? These questions boys and girls are what’s facing investors Tuesday. Then again, it’s only Tuesday and we’ll wait, if the trading gods allow, for Friday’s Employment Report to give us a clearer picture.

In the meantime markets sold-off sharply with interest rates oddly rising (TLT), the dollar falling, gold rising and oil prices leaping higher. The line of the day belonged to the Saudi Oil Minister who ably advised investors “the future of oil prices were up to Allah to predict”. In that regard, I strongly suggest investors read an old book The Arab Mind, which should provide a good understanding of how this group thinks.

Leading market sectors higher included: Brazil (EWZ), Colombia (GXG), Chile (ECH), Russia (RSX), Crude Oil (USO), Silver (SLV), Palladium (PALL) and Gold (GLD).

Leading market sectors lower included: Everything else.                                                          

The top 20 market movers by percentage change in volume whether rising or falling is available daily.

Volume was heavier on selling and breadth per the WSJ was negative.

5-5-2015 5-51-09 PM Diary

Charts of the Day
  • SPY 5 MINUTE

    SPY  5  MINUTE

  • SPY DAILY

    SPY DAILY

  • SPX WEEKLY

    SPX WEEKLY

  • INDU WEEKLY

    INDU WEEKLY

  • RUT WEEKLY

    RUT WEEKLY

  • NDX WEEKLY

    NDX WEEKLY

  • XLB WEEKLY

    XLB WEEKLY

  • XLE WEEKLY

    XLE WEEKLY

  • XLF WEEKLY

    XLF WEEKLY

  • XLI WEEKLY

    XLI WEEKLY

  • XLP WEEKLY

    XLP WEEKLY

  • XLY WEEKLY

    XLY WEEKLY

  • XRT WEEKLY

    XRT WEEKLY

  • XLU WEEKLY

    XLU WEEKLY

  • ITB WEEKLY

    ITB WEEKLY

  • IYR WEEKLY

    IYR WEEKLY

  • IYT WEEKLY

    IYT  WEEKLY

  • TLT WEEKLY

    TLT WEEKLY

  • UUP WEEKLY

    UUP WEEKLY

  • FXE WEEKLY

    FXE WEEKLY

  • FXY WEEKLY

    FXY WEEKLY

  • GDX WEEKLY

    GDX WEEKLY

  • SLV WEEKLY

    SLV WEEKLY

  • PALL WEEKLY

    PALL WEEKLY

  • DBB WEEKLY

    DBB WEEKLY

  • USO WEEKLY

    USO WEEKLY

  • DBC WEEKLY

    DBC WEEKLY

  • EFA WEEKLY

    EFA WEEKLY

  • IEV WEEKLY

    IEV WEEKLY

  • EEM WEEKLY

    EEM WEEKLY

  • GREK WEEKLY

    GREK WEEKLY

  • EWG WEEKLY

    EWG WEEKLY

  • EWU WEEKLY

    EWU WEEKLY

  • EWJ WEEKLY

    EWJ WEEKLY

  • GXG WEEKLY

    GXG WEEKLY

  • EWZ WEEKLY

    EWZ WEEKLY

  • RSX WEEKLY

    RSX WEEKLY

  • EPI WEEKLY

    EPI WEEKLY

  • FXI WEEKLY

    FXI WEEKLY

  • NYMO DAILY

    NYMO  DAILY

    The NYMO is a market breadth indicator that is based on the difference between the number of advancing and declining issues on the NYSE. When readings are +60/-60 markets are extended short-term.

  • NYSI DAILY

    NYSI DAILY

    The McClellan Summation Index is a long-term version of the McClellan Oscillator. It is a market breadth indicator, and interpretation is similar to that of the McClellan Oscillator, except that it is more suited to major trends. I believe readings of +1000/-1000 reveal markets as much extended.

  • VIX WEEKLY

    VIX WEEKLY

    The VIX is a widely used measure of market risk and is often referred to as the "investor fear gauge". Our own interpretation is highlighted in the chart above. The VIX measures the level of put option activity over a 30-day period. Greater buying of put options (protection) causes the index to rise.


 

 

Since the October rout we’ve seen plenty of days like Tuesday.

At the same time markets have been squarely in a trading range as investors try to understand how the Fed is coping with policies they probably don’t fully understand.

As a matter of fact many investors don’t know what to make of things.

Portfolio managers have a duty to make their client’s money.

The overwhelming majority of them do so by being long. Having a safe amount in cash isn’t what they’re permitted to do which is understandable.

Nevertheless they’re conflicted about markets since they only preach one theme—buy, buy, buy.

In fact, cash is now the enemy so much that the Australian government is now taxing deposits.

Further, with negative interest rates in Europe being out of markets has its own penalty.

It’s the new world order central banks have created.

Wednesday features ADP Employment Data, Productivity & Costs and pep talks from Dennis Lockhart and Janet Yellen. This should be fun if nothing else.

Let’s see what happens.

 

Sign up to become a premium member of the ETF Digest and receive more of our detailed charts with actionable alerts.

You can follow our pithy comments on twitter and like us on facebook.

...

Headshot David Fry xsmall

Dave Fry is founder and publisher of ETF Digest and has been covering U.S. and global ETFs since 2001.  ETF Digest was named one of the most informative ETF websites in the 10th Annual Global ETF Awards.

He is the author of "Create Your own ETF Hedge Fund: A Do-It-Yourself Strategy for Private Wealth Management" published by Wiley Finance and "The Best ETFs: U.S. Equities, A Companion Guide to Building Your ETF Portfolio".



Archives
Disclaimer

ETF Digest™
 

Disclaimer: The charts and comments are only the author's view of market activity and aren't recommendations to buy or sell only any security. Market sectors and related ETF's 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 annotation's 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

 

ETF Digest

Market Summary
NYSE Composite Index S&P 500 Index Nasdaq Composite Index Russell 2000 Small Cap Index NYSE Composite Index S&P 500 Index Nasdaq Composite Index Russell 2000 Small Cap Index 10 Year Treasury Note Yield Gold Bugs Index Morgan Stanley High Tech 35 Index Market Chart
Commodity Quote Change Change % NY
Gold1,195.401.400.12 % 09:24
WTI Crude Futr61.991.592.63 % 08:51
Index Quotes Change Change % Local
CRB232.461.620.70 % 09:07
US Dollar94.52-0.75-0.79 %09:03
Index Quotes Change Change % Local
VIX14.311.4611.36 % 05/05
MSCI Value Daily MTD YTD
Brazil1823.5892.04 %1.28 % -0.48 %
Russia581.7894.01 %3.25 % 43.68 %
India499.5830.12 %2.40 % 0.64 %
China81.886-1.83 %-1.70 %24.00 %