October Brings Delayed Market Troubles
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October 01, 2014

10-1-2014 6-42-16 PM Assist

We closed the third quarter with barely enough bullish momentum to allow Da Boyz to collect some bonus money and walk away. They’re too busy shopping for Porsche’s and other fineries to allow them some time off. Naturally they expect to return later in the fourth quarter to score more gains for another round of bonuses. That’s the way we’ve rolled since this 6 year rally began.

Stocks were hit higher by several factors that have been on the radar the past two weeks but overwhelmed by bonus junkies. The litany includes geopolitical concerns (Ukraine, Hong Kong, our ISIS pals and etc), the quality of U.S. earnings reports scheduled for next week, EU’s economy, potential currency wars among the G-8 and declining economic data globally.

Economic data in the U.S. featured: ADP Employment Report 213K vs 200K expected & prior 202K (not the most reliable data since they changed their methodology); PMI Mfg Index dropped slightly 57.5 vs 58 expected & prior 57.9; ISM Mfg Index fell sharply to 56.6 vs 58 expected & prior 59 and Construction Spending fell again -0.8% vs 0.5% expected & prior 1.2%.

The ECB is set to meet Thursday and Mario Draghi is on the spot given all the much delayed promises for QE and other stimulus (“all possible measures are on the table” and etc). During the year since making these promises he’s not done anything beyond talking. It’s rumored that he wants to buy junk Greek debt (with others to follow theoretically) which hasn’t pleased the Germans any. So we’ll see what happens.

Meanwhile Hong Kong is starting to celebrate a two day holiday which theoretically will bring out even more Occupy Hong Kong demonstrators. Clearly China is not pleased.

Stocks were hit hard once again Wednesday as the new quarter began. On Monday we hedged our Growth & Income Portfolio and remained flat Aggressive Growth and almost all ETFs on the Select Menu of over 80 ETFs.

Leading market sectors higher included: Gold (GLD), Silver (SLV), Junior Gold Miners (GDXJ), Utilities (XLU), Bonds (TLT) and not much else.

Leading market sectors lower included: Basically everything from everywhere. Things were bad enough that even VIX futures and options stopped trading. (That saved me some time thank you.)

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

Volume was very heavy which is typical of major sell days. Breadth per the WSJ was negative as you might imagine.

10-1-2014 7-26-25 PM Diary

Charts of the Day
  • SPY 5 MINUTE

    SPY 5 MINUTE

  • SPY DAILY

    SPY DAILY

  • SPX WEEKLY

    SPX WEEKLY

  • DIA WEEKLY

    DIA WEEKLY

  • INDU WEEKLY

    INDU WEEKLY

  • IWM DAILY

    IWM DAILY

  • RUT WEEKLY

    RUT WEEKLY

  • NDX WEEKLY

    NDX WEEKLY

  • XLF WEEKLY

    XLF WEEKLY

  • XLB WEEKLY

    XLB WEEKLY

  • XLE WEEKLY

    XLE WEEKLY

  • XLI WEEKLY

    XLI WEEKLY

  • XLP WEEKLY

    XLP WEEKLY

  • XLU WEEKLY

    XLU WEEKLY

  • XLV WEEKLY

    XLV WEEKLY

  • XLY WEEKLY

    XLY WEEKLY

  • XRT WEEKLY

    XRT WEEKLY

  • IYR WEEKLY

    IYR WEEKLY

  • IYT WEEKLY

    IYT WEEKLY

  • ITB WEEKLY

    ITB WEEKLY

  • HYG WEEKLY

    HYG WEEKLY

  • TLT WEEKLY

    TLT WEEKLY

  • UUP WEEKLY

    UUP WEEKLY

  • FXE WEEKLY

    FXE WEEKLY

  • FXY WEEKLY

    FXY WEEKLY

  • BZF WEEKLY

    BZF 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

  • DBA WEEKLY

    DBA WEEKLY

  • JJG WEEKLY

    JJG WEEKLY

  • DBC WEEKLY

    DBC WEEKLY

  • EFA WEEKLY

    EFA WEEKLY

  • IEV WEEKLY

    IEV WEEKLY

  • EEM WEEKLY

    EEM WEEKLY

  • EWU WEEKLY

    EWU WEEKLY

  • EWG WEEKLY

    EWG WEEKLY

  • EWA WEEKLY

    EWA WEEKLY

  • EWC WEEKLY

    EWC WEEKLY

  • EWH WEEKLY

    EWH WEEKLY

  • EWZ WEEKLY

    EWZ WEEKLY

  • RSX WEEKLY

    RSX WEEKLY

  • EPI WEEKLY

    EPI WEEKLY

  • GXC WEEKLY

    GXC 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

So markets are short-term oversold again. We saw this condition the prior week then we had the Friday comeback rally which lifted indexes off their lows. Now we may be in a “wax on, wax off” repeat. That said, markets are in some potentially serious trouble. Don’t worry just yet since many Fed speakers will be out on the hustings selling their BS.

Thursday brings once again Jobless Claims and Factory Orders. And, who can forget another moment in the sun for Mario Draghi?

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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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
Gold1,217.903.900.32 % 22:44
WTI Crude Futr90.800.070.08 % 22:06
Index Quotes Change Change % Local
CRB277.91-0.64-0.23 %17:28
US Dollar85.97-0.03-0.04 %17:00
Index Quotes Change Change % Local
VIX16.710.402.45 % 10/01
MSCI Value Daily MTD YTD
Brazil2112.951-2.64 %-2.64 %-4.74 %
Russia604.015-1.16 %-1.16 %-23.24 %
India501.6920.21 %0.21 % 23.17 %
China61.6650.00 %0.00 % -2.28 %