Markets Spinning Like A Roulette Wheel
0
April 15, 2014

4-15-2014 6-41-57 PM WHEEL

One minute markets are down big and the next up big.

It’s been that kind of action the past week or so. Until it’s proved differently markets are just moving like they did in February with many of the same issues present. Throw Russian action into the mix and markets become more event driven.

U.S. economic data was weak as the Empire State Mfg Survey was only 1.29 vs 7.5 expected & prior 5.61 with many blaming weather as a factor. But that excuse is becoming inappropriate and tiresome. The Housing Market Index was basically flat at 47 vs 49 expected & prior revised lower from 47 to 46. Lastly Janet Yellen threw some cold water on conditions by stating some banks will need to add more capital. For many banks, this is both negative and no easy thing to do.

Sure we have Putin orchestrating a Ukraine crisis by having some of his coons simultaneously seize police departments in various areas of Eastern Ukraine. Ukraine jets are in the air and injuries and damages are present. Obama will send Biden to Kiev next week to do what exactly?

Meanwhile China’s broadest measure of new credit dropped precipitously 19% in March and M2 money supply dropped to 12.1% from 13.3%. To many analysts this means GDP growth probably dropped to an anemic, by Chinese standards, to less than 7.3% which is around the lows of a dismal 2009. This kind of news hit emerging markets hard causing drops in many separate markets.

Markets opened higher then fell sharply only to turn the corner higher by early afternoon as investors are left to watch the roulette wheel in spin mode. It was also a day when equity sectors reversed positions as previously leading Emerging Markets fell sharply while U.S. sectors rallied. Or as Batman famously put it to Robin: “Izquierda a la derecha”.

Leading market sectors higher included: Financials (XLF), Energy (XLE), REITs (IYR), Healthcare (XLV), Utilities (FXU), Transports (IYT), Biotech (IBB), Semiconductors (SMH), SPDR Pharma (XPH), Bonds (TLT) and Small Cap Value (VBR).

Leading market sectors lower included: Gold Miners (GDX), Gold (GLD), China (FXI), Brazil (EWZ), Mexico (EWW), India (EPI), Russia (RSX), Emerging Markets (EEM), Germany (EWG), EAFE (EFA), Turkey (TUR), Europe (VGK), Solar (TAN), Silver (SLV) and Base Metals (DBB).

Chart of the Day: iShares China 25 Large Cap ETF (FXI) is displayed below on a weekly chart. Note two reasonably (not perfect) high (HI) and low (LO) indicators with the first in late September 20, 2013 and the next February 14, 2014. If trading FXI, these produced decent returns. We have no position in FXI.

4-15-2014 6-42-41 PM FXI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

Volume was heavy especially on early selling. Breadth per the WSJ was modestly positive.

4-15-2014 6-44-11 PM diary

 

Charts of the Day
  • SPY 5 MINUTE

    SPY 5 MINUTE

  • SPY DAILY

    SPY DAILY

  • SPX WEEKLY

    SPX WEEKLY

  • INDU DAILY

    INDU DAILY

  • INDU WEEKLY

    INDU WEEKLY

  • RUT WEEKLY

    RUT WEEKLY

  • NDX WEEKLY

    NDX WEEKLY

  • IGV WEEKLY

    IGV WEEKLY

  • SMH WEEKLY

    SMH WEEKLY

  • XLF WEEKLY

    XLF WEEKLY

  • XLY WEEKLY

    XLY WEEKLY

  • FDN WEEKLY

    FDN WEEKLY

  • IYT WEEKLY

    IYT WEEKLY

  • IYR WEEKLY

    IYR WEEKLY

  • ITB WEEKLY

    ITB WEEKLY

  • VTV WEEKLY

    VTV WEEKLY

  • IBB WEEKLY

    IBB WEEKLY

  • CVY WEEKLY

    CVY WEEKLY

  • HVPW WEEKLY

    HVPW WEEKLY

  • TLT WEEKLY

    TLT WEEKLY

  • UUP WEEKLY

    UUP WEEKLY

  • FXE WEEKLY

    FXE WEEKLY

  • FXY WEEKLY

    FXY WEEKLY

  • FXA WEEKLY

    FXA WEEKLY

  • GLD WEEKLY

    GLD WEEKLY

  • GDXJ WEEKLY

    GDXJ WEEKLY

  • SLV WEEKLY

    SLV WEEKLY

  • JJC WEEKLY

    JJC WEEKLY

  • USO WEEKLY

    USO WEEKLY

  • UNG WEEKLY

    UNG WEEKLY

  • DBC WEEKLY

    DBC WEEKLY

  • EFA WEEKLY

    EFA WEEKLY

  • VGK WEEKLY

    VGK WEEKLY

  • EEM WEEKLY

    EEM WEEKLY

  • EWG WEEKLY

    EWG WEEKLY

  • EWC WEEKLY

    EWC WEEKLY

  • EWA WEEKLY

    EWA WEEKLY

  • EWZ WEEKLY

    EWZ WEEKLY

  • EWY WEEKLY

    EWY WEEKLY

  • TUR WEEKLY

    TUR WEEKLY

  • VNM WEEKLY

    VNM WEEKLY

  • RSX WEEKLY

    RSX WEEKLY

  • GXC WEEKLY

    GXC WEEKLY

  • NYMO

    NYMO

    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

    NYSI

    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

    VIX

    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

One notion about today’s rally corresponded with Japan’s central bank stating they may reduce interest rates further. Does that make sense to you? I thought not.

Wednesday is more chatter from Janet Yellen and some have even stated she needed to “re-introduce” herself to markets. Really? Is confidence in her that low? Wednesday also features Housing Starts (pay attention to starts vs permits), Industrial Production and the Fed’s Beige Book.

The game of beating much lower earnings reports is better than fantasy sports. I noticed even CNBC keeps a scoreboard of companies beating analysts’ estimates. How crazy is that?

Let’s see what happens.

 

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ETF Digest™
 

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
Gold1,303.900.200.02 % 06:30
WTI Crude Futr104.680.930.90 % 05:53
Index Quotes Change Change % Local
CRB309.24-1.85-0.59 %17:28
US Dollar79.870.000.00 % 16:59
Index Quotes Change Change % Local
VIX15.61-0.50-3.10 %04/15
MSCI Value Daily MTD YTD
Brazil2279.949-3.28 %0.80 % 2.79 %
Russia624.549-3.23 %-7.23 %-20.63 %
India439.997-0.49 %0.17 % 8.03 %
China59.590-1.93 %0.32 % -5.57 %