Scotland Votes No
0
September 19, 2014

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The other “no” was given by the Alibaba (BABA) selling group to retail investors trying to get some issues at the$68 IPO price. Of course, there was enough arm-twisting by the huge selling group members to their best clients to buy BABA or else never see another deal again. This allowed for oversubscribed conditions as BABA opened at $92 making some IPO buyers instant gains of at least 35%. You retail suckers had to pay up mightily as the stock rose as high as $99.60.

Alibaba has its naysayers who don’t like the structure of the deal with long time emerging markets leader Mark Mobius to pan the stock due to its strange structure.

With quadwitching on deck markets were more volatile than recently which is typical of these events. Stocks were mixed and many sectors were quite weak as outlined on the list of market sectors below. But it should be emphasized that many of the same markets referred to have been weak all this week. This is a disturbing sign for markets to separate significantly like this.

The dollar rose sharply once again defying expectations of a “no” vote leading to a weaker dollar and higher pound and euro. All of this continues to crush most commodity sectors which have been in decline most of third quarter.

Leading market sectors higher included: Bonds (TLT) and Dollar (UUP).

Leading market sectors lower included: Financials (XLF), Banks (KBE), Regional Banks (KRE), Energy (XLE), Industrials (XLI), Homebuilders (ITB); Retail (XRT), Semiconductors (SMH), Materials (XLB), Small Caps (IWM), Mid-Caps (MDY), Small Cap Value (IWN), Solar (TAN), China (FXI), Australia (EWA), India (EPI), Brazil (EWZ), Canada (EWC), Turkey (TUR), Emerging Markets (EEM), Multi-Asset Dividend (CVY), International REITs (RWX), Coal Producers (KOL), Gold (GLD), Gold Miners (GDX), Agriculture (DBA) and Commodity Tracking ETF (DBC).

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

Volume increased given quadwitching but breadth per the WSJ was negative.

9-19-2014 8-01-02 PMDiary

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

  • XLB WEEKLY

    XLB WEEKLY

  • XLE WEEKLY

    XLE WEEKLY

  • XLF WEEKLY

    XLF WEEKLY

  • XLI WEEKLY

    XLI WEEKLY

  • XLV WEEKLY

    XLV WEEKLY

  • IBB WEEKLY

    IBB WEEKLY

  • XLY WEEKLY

    XLY WEEKLY

  • XRT WEEKLY

    XRT WEEKLY

  • IYR WEEKLY

    IYR WEEKLY

  • ITB WEEKLY

    ITB WEEKLY

  • TAN WEEKLY

    TAN WEEKLY

  • TLT WEEKLY

    TLT WEEKLY

  • UUP WEEKLY

    UUP WEEKLY

  • FXE WEEKLY

    FXE WEEKLY

  • FXB WEEKLY

    FXB WEEKLY

  • FXA WEEKLY

    FXA WEEKLY

  • FXY WEEKLY

    FXY WEEKLY

  • GLD WEEKLY

    GLD WEEKLY

  • GDX WEEKLY

    GDX WEEKLY

  • SLV WEEKLY

    SLV WEEKLY

  • DBB WEEKLY

    DBB WEEKLY

  • USO WEEKLY

    USO WEEKLY

  • DBA WEEKLY

    DBA WEEKLY

  • JJC WEEKLY

    JJC WEEKLY

  • EFA WEEKLY

    EFA WEEKLY

  • EEM WEEKLY

    EEM WEEKLY

  • IEV WEEKLY

    IEV WEEKLY

  • EWU WEEKLY

    EWU WEEKLY

  • EWC WEEKLY

    EWC WEEKLY

  • EWA WEEKLY

    EWA 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.


     

 

 

 

Closing Summary

Quadwitching can certainly mislead investors as to market trends and how they might be disrupted artificially by a mechanical event. And sure, the Scottish “no” vote and the noise surrounding Alibaba’s IPO (including how rigged it was away from retail investors) cleared the deck of some major issues. But what is troubling is how poorly international markets are performing away from US headline indexes like the Dow or S&P 500. This kind of action cannot persist for long.

It wouldn’t surprise me to see some currency intervention by central banks to stem the rise in the dollar and squeeze some leveraged shorts in some currency markets.

Let’s see what happens.

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...

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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
Gold1,217.20-8.60-0.70 %09/19
WTI Crude Futr92.45-0.62-0.67 %17:14
Index Quotes Change Change % Local
CRB279.40-1.54-0.55 %17:28
US Dollar84.930.540.63 % 16:59
Index Quotes Change Change % Local
VIX12.110.080.67 % 16:14
MSCI Value Daily MTD YTD
Brazil2397.014-1.10 %-10.97 %8.06 %
Russia635.075-1.54 %-2.12 %-19.29 %
India514.6190.04 %1.25 % 26.35 %
China65.0430.21 %-1.65 %3.08 %