There was one economic data point Friday: Germany. The so-called IFO Business Climate rose to 107.4 vs 104.3 previous, which reversed the miserable manufacturing data from Thursday. This allowed equity markets in Europe and the U.S. to rally. Markets had become quickly oversold on a confluence of negative news and bulls were desperate for any data point to allow an end of week rally. Nevertheless the focus of the rally was in western developed markets as emerging markets for example were quiet by comparison.

Fed Chairman Bernanke, not so coincidentally, appeared on a Business Week article Friday (a designed leak?) with news there are no bubble risks anywhere, as far as he can tell. Of course, this is the same man, who just prior to the housing crisis, famously and repeatedly shrugged-off this could exist under his watch. In fact here are Bernanke’s incorrect bullish housing comments via the following YouTube video. But the appearance of Bernanke’s sudden comments also served to lift equity prices. The question one should have is why would you believe any Bernanke forecast?

Between some slight oversold conditions, Friday, Bernanke showing up and a single good German data point, stocks rallied. Hewlett Packard’s (HPQ) better results were also helpful to the Dow (DIA) and tech sectors. The much oversold materials (XLB) rallied but at the same time copper (JJC) and base metals (DBB) made little headway. They’re indirectly connected to materials but are also a better economic forecaster the Fed Chairman. The dollar (UUP) was flat to slightly higher as was gold (GLD). Commodities (DBC) were mostly unchanged given slightly higher energy prices. Bonds (TLT) were also slightly higher and not responding much to the equity rebound.

One more adventurous and volatile area is in Vietnam (VNM). Here the market has been richly rewarding if you employed some discipline in trading it. Thursday the buzz was margin calls were being made to various traders and brokers. In addition, another rumor was the government was seeking the arrest of Wall Street broker. All this unhinged markets but lucky for our system, and as annotated on the chart below, we were able to trade our way out of much danger with good profits as the daily chart below demonstrates.

Volume was light and breadth per the WSJ was positive.

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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.