Investors Face Hobson Choice
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August 19, 2014

8-19-2014 6-18-16 PM hobsons choice

Hobson owned a livery stable and he rotated his horses to different stalls. He offered them the choice of taking the horse in the first stable or none at all. Henry Ford also offered a variation of Hobson’s Choice since customers could buy a car from him but it had to be black. The stock market offers many choices but only stocks are effective as bonds offer no yield while Fed policies have forced investors to stocks or nothing else.

This is basically the issue for investors in financial markets, buy stocks or nothing else. Farmland is admittedly in a bubble as Iowa farmland now goes for $8,500 per acre. If you can buy it right, some residential real estate offers a decent rental yield. Then there is the weird world of collectibles where you really need to know what you’re doing and have adequate cash.

So stock markets remain in play at least for most institutions. We’ve seen heavy volume sell-offs meaning most retail investors continue to loathe and leave markets. It remains a market for captive retirement money and institutions including financial and hedge funds.

Tuesday markets rose once again helped by a friendly CPI report and more New Home Construction which rose to 1.095M vs 963K expected & prior 945K.

Leading market sectors higher included: DOW (DIA), S&P 500 (SPY), Small Caps (IWM), Tech (QQQ), Home Builders (ITB), Retail (XRT), Consumer Discretionary (XLY), Utilities (XLU), Materials (XLB), Oil & Exploration (XOP), Healthcare (XLV), Value (VTV), Small Cap Value (VBR), Solar (TAN), South Korea (EWY), Brazil (EWZ), Taiwan (EWT), Emerging Markets (VWO), Hong Kong (EWH), Turkey (TUR), Russia (RSX), India (EPI), Natural Gas (UNG) and Asia ex-Japan (AAXJ).

Leading market sectors lower included: Bonds (TLT), Crude Oil (USO), Agriculture (DBA), Silver (SLV), Gold Miners (GDX), Palladium (PALL), Copper (JJC) and Sugar (SGG).

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

Volume was once again light and breadth per the WSJ was positive.

8-19-2014 6-19-36 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

  • IGV WEEKLY

    IGV WEEKLY

  • FDN WEEKLY

    FDN WEEKLY

  • XLB WEEKLY

    XLB WEEKLY

  • XLI WEEKLY

    XLI WEEKLY

  • XLE WEEKLY

    XLE WEEKLY

  • XLV WEEKLY

    XLV WEEKLY

  • IBB WEEKLY

    IBB WEEKLY

  • IYT WEEKLY

    IYT WEEKLY

  • XLU WEEKLY

    XLU WEEKLY

  • ITB WEEKLY

    ITB WEEKLY

  • IYR WEEKLY

    IYR WEEKLY

  • TAN WEEKLY

    TAN WEEKLY

  • TLT WEEKLY

    TLT WEEKLY

  • UUP WEEKLY

    UUP WEEKLY

  • FXE WEEKLY

    FXE WEEKLY

  • FXB WEEKLY

    FXB WEEKLY

  • GLD WEEKLY

    GLD WEEKLY

  • GDX WEEKLY

    GDX WEEKLY

  • SLV WEEKLY

    SLV WEEKLY

  • JJC WEEKLY

    JJC WEEKLY

  • DBA WEEKLY

    DBA WEEKLY

  • DBC WEEKLY

    DBC WEEKLY

  • VEA WEEKLY

    VEA WEEKLY

  • VGK WEEKLY

    VGK WEEKLY

  • VWO WEEKLY

    VWO WEEKLY

  • EWZ WEEKLY

    EWZ WEEKLY

  • EWW WEEKLY

    EWW WEEKLY

  • RSX WEEKLY

    RSX WEEKLY

  • EPI WEEKLY

    EPI WEEKLY

  • HAO WEEKLY

    HAO 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

The major action Wednesday will focus on Fed Minutes released at 2 PM. It’s always interesting since what is it markets didn’t know about these since the rate decision a few weeks ago? Why don’t they just release them immediately?

If there’s any confusion Janet Yellen will be speaking from Jackson Hole on Friday—that’ll take care of things.

Let’s see what happens.

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...

Headshot David Fry xsmall

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
Gold1,300.502.300.18 % 00:50
WTI Crude Futr96.830.420.44 % 00:16
Index Quotes Change Change % Local
CRB287.700.660.23 % 12:28
US Dollar82.130.190.23 % 12:20
Index Quotes Change Change % Local
VIX12.06-0.15-1.23 %12:07
MSCI Value Daily MTD YTD
Brazil2546.7441.53 %4.78 % 14.82 %
Russia679.2170.71 %3.09 % -13.68 %
India505.7380.36 %1.94 % 24.17 %
China67.1630.36 %1.75 % 6.43 %