A Messy End To July
0
July 31, 2015

It was a positive month for most indexes thanks to some window dressing to close the month.

To do so is illegal of course but those doing so are rarely, if ever, caught.

Nevertheless, it was a nerve racking month for investors overall but the bottom line for now is the long 2015 trading range for major U.S. indexes continues.

Energy has been a large drag on many large cap equity indexes. Many knew energy stocks were weak but the weakness had a larger impact than most expected. Exxon and Chevron reported profits down 50% which impacted markets negatively.

But that wasn’t all that had a negative impact as the Employment Cost Index fell to only 0.2%, the worst wage growth in U.S. history. That in turn encapsulates the inescapable income inequality we read so much about.

Many on Wall Street acknowledge Fed policies among other things are to blame. Goldman Sachs honcho Lloyd Blankfein admits low interest rates have allowed people like him who have assets profited vs many of those on Main Street who don’t.

In addition, as we’ve been reporting the past few years, abundant corporate stock buybacks, financed by cheap interest rates, have made corporate earnings look better even if headline results don’t impress overall.

Meanwhile, commodity markets continue to telegraph deflation which the Fed doesn’t acknowledge.

Stocks opened higher for the most part but as the day wore on the rally fell apart.

Leading market sectors higher included: Small Caps (IWM), Biotech (IBB), Healthcare (XLV), REITs (IYR), Utilities (XLU), Homebuilders (ITB), Emerging Markets (EEM), EAFE (EFA), Europe (VGK) Germany (EWG), European Monetary Union (EZU), Japan (EWJ), India (EPI), Brazil (EWZ), South Korea (EWY), Mexico (EWW), Malaysia (EWM), Thailand (THD), Indonesia (IDX) Gold (GLD), Gold Stocks (GDX), Euro (FXE) , Corporate Investment Grade Bonds (LQD) and Treasury Bonds (TLT)

Leading market sectors lower included: Energy (XLE), Oil & Gas Exploration (XOP), Financials (XLF), Banks (KBE), Transports (IYT), Crude Oil (USO), Natural Gas (UNG) and Commodity Tracker (DBC).

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

Volume was relatively light and breadth per the WSJ was positive. But one look at Money Flows (below) you’ll be struck by the divergence.

7-31-2015 6-26-45 PM dIARY

 

Charts of the Day
  • SPY 5 MINUTE

    SPY  5  MINUTE

  • SPY DAILY

    SPY DAILY

  • SPX WEEKLY

    SPX WEEKLY

  • INDU WEEKLY

    INDU WEEKLY

  • RUT WEEKLY

    RUT WEEKLY

  • NDX WEEKLY

    NDX WEEKLY

  • XLB WEEKLY

    XLB WEEKLY

  • XLE WEEKLY

    XLE WEEKLY

  • XLF WEEKLY

    XLF WEEKLY

  • XLI WEEKLY

    XLI WEEKLY

  • XLP WEEKLY

    XLP WEEKLY

  • XLY WEEKLY

    XLY WEEKLY

  • XRT WEEKLY

    XRT WEEKLY

  • XLV WEEKLY

    XLV WEEKLY

  • IBB WEEKLY

    IBB WEEKLY

  • IYT WEEKLY

    IYT  WEEKLY

  • XLU WEEKLY

    XLU WEEKLY

  • IYR WEEKLY

    IYR WEEKLY

  • ITB WEEKLY

    ITB WEEKLY

  • TLT WEEKLY

    TLT WEEKLY

  • UUP WEEKLY

    UUP WEEKLY

    UUP

  • FXE WEEKLY

    FXE WEEKLY

  • FXY WEEKLY

    FXY WEEKLY

  • GLD WEEKLY

    GLD WEEKLY

  • GDX WEEKLY

    GDX WEEKLY

  • SLV WEEKLY

    SLV WEEKLY

    SLV

  • DBB WEEKLY

    DBB WEEKLY

  • USO WEEKLY

    USO WEEKLY

  • DBA WEEKLY

    DBA WEEKLY

  • DBC WEEKLY

    DBC WEEKLY

  • EFA WEEKLY

    EFA WEEKLY

  • IEV WEEKLY

    IEV WEEKLY

  • EEM WEEKLY

    EEM WEEKLY

  • EWG WEEKLY

    EWG WEEKLY

  • EWU WEEKLY

    EWU WEEKLY

  • EWI WEEKLY

    EWI WEEKLY

  • EWJ WEEKLY

    EWJ WEEKLY

  • EWY WEEKLY

    EWY WEEKLY

  • AAXJ WEEKLY

    AAXJ WEEKLY

  • THD WEEKLY

    THD WEEKLY

  • EWZ WEEKLY

    EWZ WEEKLY

  • RSX WEEKLY

    RSX WEEKLY

  • EPI WEEKLY

    EPI WEEKLY

  • FXI WEEKLY

    FXI 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.


So a positive week overall yields another positive month for investors.

The only trouble is the trading range remains as we enter a typically low volume month of August.

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. ETF Digest was named one of the most informative ETF websites in the 10th Annual Global ETF Awards.



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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
Gold1,092.20-4.00-0.37 %11:05
WTI Crude Futr46.15-0.97-2.06 %10:33
Index Quotes Change Change % Local
CRB201.16-1.41-0.70 %10:48
US Dollar97.340.020.02 % 10:43
Index Quotes Change Change % Local
VIX13.090.978.00 % 10:28
MSCI Value Daily MTD YTD
Brazil1440.7070.85 %-12.29 %-21.37 %
Russia472.224-0.01 %-7.92 %16.62 %
India508.1621.24 %1.47 % 2.37 %
China66.2490.40 %-10.93 %0.32 %