Markets opened the trading day Friday with some confusion over just what to make of different takes between Fed Vice-Chair Fischer’s and Chair Yellen’s comments regarding monetary policies going forward. Initial reactions to these remarks were two sided but in the end settled in a state of confusion.
What made it so?
The view was recent economic data was trending positive enough to bear an interest rate increase in September. For many of us this is more than just a little amusing given more serious economic weakness as, weak GDP and consumer data. From my view the ongoing disconnect between obviously weak economic data (GDP and persistent unemployment data among others) remain more than just a little disturbing. In fact, they hint at deliberate data manipulation and cherry-picking of data making results fit goals rather than being more objective. Bottom line, in an election year political demands easily can interfere making results more seem spurious to many.
Is the Fed looking for an excuse to raise interest rates? This might be so since even they might acknowledge these have been held too low for too long.
The Fed acknowledges even it has no idea what the future portends as the “fan chart” (below) displays the broad range it forecasts for the path ahead.
Below is the heat map from Finviz reflecting those ETF market sectors moving higher (green) and falling (red). Dependent on the day (green) may mean leveraged inverse or leveraged short (red).
Volume rose Friday to complete an ultra-light volume week. Breadth per the WSJ was mixed to negative.
As we enter the final week of the summer of 2016, the following is a list of ETFs with technical overbought or extended valuations.
These numbers signify in the left column (buy to close short) or right column (sell to close long).
Make of conditions what you will.
For us markets are living on borrowed time. But that’s if the old rules of valuations and conditions hold true. That said, these aren’t even your big brother’s markets.
Let’s see what happens.
Dave Fry is founder and publisher of ETF Digest and has been covering U.S. and global ETFs since 2001.
Named as one of the Top 22 ETF Experts You Need To Follow on Twitter for continuing to deliver high quality analysis and commentary through the ETFDigest Twitter feed.
ETF Digest was named in the Top 50 Investing Blogs.
Ranked #16 in the Top 25 Best ETF Newsletters in 2015.
ETF Digest was awarded one of the most informative ETF websites in the 10th Annual Global ETF Awards.
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