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BULLS REMAIN DETERMINED

February 05, 2013

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There wasn’t much news Tuesday to ignite a rally but bulls are still flying with the Fed the wind beneath their wings.

Yesterday’s sell-off was left in the rear view mirror as every opportunity to buy a dip remains the order of the day. Sure there were more earnings which were well-received, like better than expected results from Archer Daniels Midland (ADM), while YUM Brands (YUM) results disappointed but were quickly shrugged off. Even a significant lawsuit by the government on McGraw Hill (MHP) for S&P’s ratings malfeasance during the financial crisis didn’t deter bulls or the financial (XLF) sector very much. The overall rally was still U.S. centric with Europe (IEV) and Emerging Markets (EEM) lagging.

Dell (DELL) took the company private with financing by Michael Dell and some investment from Microsoft (MSFT). This may mean some new joint venture product development one would think.

The market is driven by money printing liquidity and little else. Italian and Spanish problems were mere speed bumps and buying opportunities it seems.

The dollar (UUP) was flat as was gold (GLD). Commodities (DBC) overall were modestly higher along with energy (USO). Bonds (TLT) reversed course and fell despite all the Fed buying.

Volume was disappointingly low for a comeback day like Tuesday. Breadth per the WSJ was quite positive.

2-5-2013 5-21-05 PM diary

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  • $NYMO

    $NYMO


    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

    $NYSI


    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

    $VIX


    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.


  • SPY 5 MINUTE

    SPY 5 MINUTE

  • .SPX WEEKLY

    .SPX WEEKLY

  • INDU WEEKLY

    INDU WEEKLY

  • RUT WEEKLY

    RUT WEEKLY

  • QQQ WEEKLY

    QQQ WEEKLY

  • TLT WEEKLY

    TLT WEEKLY

  • UUP WEEKLY

    UUP WEEKLY

  • GLD WEEKLY

    GLD WEEKLY

  • DBC WEEKLY

    DBC WEEKLY

  • IEV WEEKLY

    IEV WEEKLY

  • EWI WEEKLY

    EWI WEEKLY

  • EWP WEEKLY

    EWP WEEKLY



Closing Comments

With all the liquidity being injected to markets it’s no wonder bulls are jumping on every dip.

Let’s see what happens.


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Disclaimer

Among other issues the ETF Digest maintains positions in: MDY, IWM, QQQQ, UDN, GLD, DBC, DBB, DBA, USL, 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.