Ben was in congress campaigning er, testifying mostly about the effectiveness of all things ZIRP and QE. He was grilled about possible risks with QE [17] especially if interest rates should rise. The Bernank saying that interest rates would rise was unlikely but he then cavalierly stated if rates rise, the Fed would just “hold back on payments” er, stiff the Treasury. That’s no big deal for him since by then he’ll be down the road writing his memoirs, making speeches and joining some big Wall Street firm as a well-paid consultant. The Bernank was also asked if he noted any bubbles or market excess and said he saw none. Meanwhile economist and gadfly Nouriel Roubini [18] stated he was bullish but said the mother of all bubbles had begun for just about everything.
Bulls did try to make some hay Tuesday with positive data from New Home Sales (437K vs 381K expected & prior 378K), December Home Prices (.9% vs .8% expected & prior .6%), Consumer Confidence (69.6 vs 61 expected & prior 58.4), and Richmond Fed Mfg Index (6 vs -3 expected & prior -12). All this pumped-up homebuilders (ITB) as Toll Bros (TOL) CEO said the housing recovery is the “real deal this time”. (What was it the last time I guess?) Home Depot (HD) reported better earnings and a $5 billion stock buyback lifting the shares over 5%. This helped the consumer discretionary sector (XLY).
Stocks rallied led by the Dow (DIA) and S&P (SPY) as Home Depot (HD) and other heavyweights spurred bulls including (IBM), (CVX), (BA), (XOM) and (UTX). Read more about (SPY) and the sequester [19] from one of our valued contributors, David Gillie.
The dollar (UUP) was flat as were commodities (DBC) with oil (USO) and base metals only slightly higher. Most notable was gold (GLD), which jumped 1.22% given global economic tensions as I d [20]escribe in this short video produced this morning [20]. Holding most markets back was Europe (IEV) and most importantly China (GXC). The world’s second largest economy has a flat tire which will impact the rest of us unless of course they start printing the yuan as well.
We’re still holding with 40% cash in our flagship portfolio having even sold some ETFs at the open Monday, which was fortuitous.
Volume clearly didn’t match Monday’s spectacular sell-off but was respectable as we melted-up again. Breadth per the WSJ was quite positive.
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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.
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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.
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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.
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SPY 5 MINUTE
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SPX WEEKLY
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INDU WEEKLY
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RUT WEEKLY
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QQQ WEEKLY
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KBE WEEKLY
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XLF WEEKLY
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ITB WEEKLY
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IYR WEEKLY
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IYT WEEKLY
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XLB WEEKLY
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XLY WEEKLY
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XLI WEEKLY
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IBB WEEKLY
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CVY WEEKLY
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AMLP WEEKLY
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HYG WEEKLY
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IGOV WEEKLY
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TLT WEEKLY
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UUP WEEKLY
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FXE WEEKLY
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FXB WEEKLY
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GLD WEEKLY
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SLV WEEKLY
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PPLT WEEKLY
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JJC WEEKLY
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XME WEEKLY
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DBC WEEKLY
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USO WEEKLY
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XLE WEEKLY
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IEV WEEKLY
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EFA WEEKLY
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EEM WEEKLY
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EWJ WEEKLY
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EWA WEEKLY
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EPI WEEKLY
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IDX WEEKLY
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EWG WEEKLY
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EWI WEEKLY
Economic data was good along with earnings from Home Depot and sales reports from Macy’s (M). Then rumors of an Apple (AAPL) stock split caused that stock to rise and given it’s weighting in most tech indexes pulled those sectors higher.
We have more Bernanke testimony Wednesday along with Durable Goods Orders. The fun should begin soon.
Disclaimer: The ETF Digest maintains active ETF trading portfolio and a wide selection of ETFs away from portfolios in an independent listing. Current “trading” positions in active portfolios if any are embedded within charts: Lazy & Hedged Lazy Portfolios maintain the follow positions: VT, MGV, BND, BSV, VGT, VWO, VNO, IAU, DJCI, DJP, VMBS, VIG, ILF, EWA, IEV, EWC, EWJ, EWG, & EWU.
The charts and comments are only the author’s view of market activity and aren’t recommendations to buy or sell any security. Market sectors and related ETFs 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 annotations 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 [21].
Among other issues the ETF Digest maintains positions in: MDY, IWM, QQQQ, UDN, GLD, DBC, DBB, DBA, USL, EFA, EEM, EWZ and FXI.
The charts and comments are only the author’s view of market activity and aren’t recommendations to buy or sell any security. Market sectors and related ETFs 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 annotations 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 [22].