Yellen For The Win Rallies Stocks
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January 29, 2015

Today Alibaba (BABA), Yahoo (YHOO) and Qualcomm (QCOM) conditions weighed on markets early.

But in the afternoon and handful of high priced Dow stocks (in the price weighted index) like BA, GS, IBM, MCD, HD and MMM were responsible for most of the gains.

"We're looking at the big household names that put out disappointing numbers this week and we're putting undue influence on that." Art Hogan, chief market strategist at Wunderlich Securities.

This is the kind of stuff market bulls put out which is the amnesia drug to help you forget crappy earnings from important companies and buy stocks. So after the post-Fed Meeting decline the short squeeze to keep January positive was launched. At the same time there was a report per Sen. Charles Schumer that Yellen privately told democrats there would no rate increase soon. That launched buy programs.

1-29-2015 6-52-19 PM SP500

 

Two completely opposite economic reports allowed investors to discard one but not the other. The bad report was a sharp decline in Pending Home Sales (-3.4% vs 0.9% expected & prior 0.6%). The good report was much lower Jobless Claims (265K vs 300K expected & prior 308K). Bulls jumped on this as in sync with Fed Meeting talking points Wednesday. We may discover later that some states were slow to report data but if not, may mark the low point just as energy worker lay-offs mount.

1-29-2015 6-53-11 PM good

 

After the close of trading Thursday we’ll have earnings from Google and Amazon and after analysts have lowered expectations we’ll see if they beat and give positive outlooks. Google (GOOG) $6.88 vs expected $7.11 and revenues lower: stock weaker after hours. Amazon (AMZN) 18 cents vs 17 cents expected and revenues slightly weaker: shares much higher after hours..

Leading market sectors higher included: S&P 500 (SPY), Tech (QQQ), Dow (DIA), Small Caps (IWM), Financials (XLF), Banks (KBE), Materials (XLB), Industrials (XLI), Consumer Discretionary (XLY), Homebuilders (ITB), Value (IWN), Healthcare (XLV), Utilities (XLU), China (FXI), India (EPI), Israel (EIS), Crude Oil (USO), Germany (EWG), Europe (VGK), France (EWQ) and many more.

Leading market sectors lower included: Gold (GLD), Silver (SLV), Metals & Mining (XME), Steel (SLX), Gold Miners (GDX), Oil Services Holders (OIH), Taiwan (EWT), Mexico (EWW), Russia (RSX), Yen (FXY), Canadian Dollar (FXE), Commodity Tracking ETF (DBC) Natural Gas (UNG) and Bonds (TLT)                                                                      

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

Volume was on par with Wednesday and breadth per the WSJ was positive as it was “risk on” once again.

1-29-2015 6-53-50 PM Diary

Charts of the Day
  • SPY 5 MINUTE

    SPY  5  MINUTE

  • SPX WEEKLY

    SPX WEEKLY

  • INDU WEEKLY

    INDU WEEKLY

    Pick3

  • RUT WEEKLY

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  • XLB WEEKLY

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  • XLE WEEKLY

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  • XLU WEEKLY

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  • XLY WEEKLY

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  • ITB WEEKLY

    ITB WEEKLY

  • IYT WEEKLY

    IYT  WEEKLY

  • IYR WEEKLY

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  • TLT WEEKLY

    TLT WEEKLY

  • UUP WEEKLY

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  • FXE WEEKLY

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  • GLD WEEKLY

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  • DBB WEEKLY

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  • USO WEEKLY

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  • VGK WEEKLY

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  • RSX WEEKLY

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  • 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.

I guess it’s not remarkable that Yellen would give private information about interest rates to the democrats and that this would be leaked by media hungry leader Schumer. But it raises many questions about impropriety, manipulation and lack of transparency. Nevertheless the bulls loved it.

Next is Friday’s Consumer Sentiment (which should be quite high given low gas prices), Chicago PMI and most important will be the GDP report. Will the latter continue at 5% or below that? We’ll be waiting for Consumer Metrics Institute to give us the appropriate analysis and details.

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
Gold1,258.20-26.10-2.03 %16:54
WTI Crude Futr44.470.020.04 % 16:15
Index Quotes Change Change % Local
CRB212.64-2.34-1.09 %16:28
US Dollar94.970.000.00 % 16:43
Index Quotes Change Change % Local
VIX18.76-1.68-8.22 %16:14
MSCI Value Daily MTD YTD
Brazil1803.547-2.46 %-1.57 %-1.57 %
Russia420.482-2.66 %3.84 % 3.84 %
India547.2220.54 %10.24 % 10.24 %
China68.768-0.07 %4.13 % 4.13 %