Markets Tank On Earnings
0
July 25, 2014

 photo kramershocked.gif

Oh dear, markets surprised bulls with real selling.

For some major sectors this type of move puts us back in trading ranges once again.

Funny how the other day we had an image of a bear trap and this could very well come true for those who jump the gun with shorting in mind.

The catalyst for the selling had to do with an accumulation of poor earnings reports from Amazon (AMZN), Visa (V), Starbucks (SBUX), Boeing (BA), Texas Instruments (TXN), KLA-Tencor (KLAC), Pandora (P) and others including some major companies that reported earnings earlier in the week.

Were markets overbought? Sure, many indicators suggest that was the case. But Fed policies have forced investors to either stretch for yield or buy growth since the only other choice was under the mattress money.

Durable Goods Orders improved on the month to 0.7% vs 0.5% expected & prior -1.00% while ex-Transportation 0.8% vs 0.7% expected & prior -0.1%. Year of Year Durable Goods Orders declined -1.6% but of greater importance is core capex shipments fell 1.00%. This could theoretically reduce future GDP data.

Despite the sell-off the S&P 500 Index closed flat on the week while the NASDAQ 100 Index posted a slight gain. The same couldn’t be said for the Dow (DIA) and Small Caps (IWM).

Leading market sectors higher included: Gold Miners (GDX), Silver Miners (SIL), China (PEK), Turkey (TUR), Dollar (UUP), Gold (GLD), Silver (SLV) and Bonds (TLT).

Leading market sectors lower included: Dow (DIA), Small Caps (IWM), Financials (XLF), Energy (XLE), Transports (IYT), Industrials (XLI), REITs (IYR), Homebuilders (ITB), Consumer Discretionary (XLY), Retail (XRT), Semiconductor (SOXX), Utilities (XLU), Russia (RSX), India (EPI), Indonesia (IDX), Germany (EWG), Taiwan (EWT), Greece (GREK) and Natural Gas (UNG) among many others.

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

Volume increased modestly from most trading days this week. Breadths per the WSJ was negative and please note Money Flow sectors below.

7-25-2014 6-58-13 PM DIARY

Charts of the Day
  • SPY 5 MINUTE

    SPY 5 MINUTE

  • SPX WEEKLY

    SPX WEEKLY

  • INDU WEEKLY

    INDU WEEKLY

  • RUT WEEKLY

    RUT WEEKLY

  • NDX WEEKLY

    NDX WEEKLY

  • QQEW WEEKLY

    QQEW WEEKLY

  • SOXX WEEKLY

    SOXX WEEKLY

  • FDN WEEKLY

    FDN WEEKLY

  • XLF WEEKLY

    XLF WEEKLY

  • XLB WEEKLY

    XLB WEEKLY

  • XLE WEEKLY

    XLE WEEKLY

  • SOCL WEEKLY

    SOCL WEEKLY

  • XLV WEEKLY

    XLV WEEKLY

  • XLI WEEKLY

    XLI WEEKLY

  • IBB WEEKLY

    IBB WEEKLY

  • XLY WEEKLY

    XLY WEEKLY

  • XRT WEEKLY

    XRT WEEKLY

  • AMJ WEEKLY

    AMJ WEEKLY

  • ITB WEEKLY

    ITB WEEKLY

  • IYR WEEKLY

    IYR WEEKLY

  • TLT WEEKLY

    TLT WEEKLY

  • UUP WEEKLY

    UUP WEEKLY

  • FXE WEEKLY

    FXE WEEKLY

  • FXY WEEKLY

    FXY WEEKLY

  • GLD WEEKLY

    GLD WEEKLY

  • GDX WEEKLY

    GDX WEEKLY

  • SLV WEEKLY

    SLV WEEKLY

  • JJC WEEKLY

    JJC WEEKLY

  • USO WEEKLY

    USO WEEKLY

  • DBA WEEKLY

    DBA WEEKLY

  • VEA WEEKLY

    VEA WEEKLY

  • VGK WEEKLY

    VGK WEEKLY

  • VWO WEEKLY

    VWO WEEKLY

  • EWZ WEEKLY

    EWZ WEEKLY

  • RSX WEEKLY

    RSX WEEKLY

  • EPI WEEKLY

    EPI WEEKLY

  • FXI WEEKLY

    FXI WEEKLY

  • PEK WEEKLY

    PEK 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.

 

 

 

Closing Summary

That was not a good close to week certainly. And, many believe earnings news have been positive but this week’s reports were quite disappointing.

July ends at the end of next week. Friday will present the Employment Report for June. This should provide more volatility.

Let’s see what happens.

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...

Dave Fry is founder and publisher of ETF Digest and has been covering U.S. and global ETFs since 2001.

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".



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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
Gold1,306.60-2.70-0.21 %02:19
WTI Crude Futr101.74-0.35-0.34 %01:45
Index Quotes Change Change % Local
CRB298.340.150.05 % 07/25
US Dollar81.150.200.25 % 07/25
Index Quotes Change Change % Local
VIX12.690.857.18 % 07/25
MSCI Value Daily MTD YTD
Brazil2563.472-0.59 %7.24 % 15.57 %
Russia678.782-1.10 %-8.19 %-13.74 %
India502.276-0.51 %1.96 % 23.32 %
China65.1950.20 %6.02 % 3.31 %