Markets rallied early then faded quickly into the close led by Microsoft (MSFT) and Intel (INTC). Since both are/were big hedge fund positions, one might imagine the big money is heading to the exits on the heels of Apple (AAPL) another previously large hedge fund holding.

There wasn’t any economic data Tuesday from the U.S. In overseas market China enacted property taxes for the first time in Shanghai and Chongiq. Somewhat related in Hong Kong, seemingly always in a property bubble, a condo sold for over $8K per square foot…seriously. Pundits in China are now worried about falling retail sales. In the eurozone, Greece (no surprise) has been given a 2 year extension to implement austerity reforms and an agreement for interim funding has been put off until November 20^th.  At the same time the Greek government is running out of money and needs $32 billion by Monday I believe. However, the troika has not figured out how to fund this yet. The Greeks are wearing us all out. Beyond this, German Investor Confidence fell to -15.7 vs -11.5 which is hardly encouraging and perhaps the Germans are getting worn out by their southern neighbors.

The dollar (UUP) and gold (GLD) were basically flat on the day. Stocks were led higher by a positive report by Home Depot (HD) which some assumed translated to a strong or recovering housing market. I’d say that is misleading. As I look about New England what I see are people remodeling existing homes they are unable to sell not to mention demand from destruction from Sandy. Commodities (DBC) were also mostly flat. Bonds (IEF) and (TLT) were higher.

Truth be told we’re short via a half dozen leveraged ETFs. This hasn’t been a profitable thing to do when the Fed is in QE and ZIRP mode. That said, we’re also long a few markets putting us in a long/short position.

Volume picked up on selling but is still relatively light. Breadth per the WSJ was negative and perhaps markets are short-term oversold again.

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