If It Is Tuesday, Markets Must Rally
0
April 22, 2014

4-22-2014 4-16-32 PM spring

The bullish overseas and emerging market rallies occurring just recently has shifted quickly and sharply back to U.S. and European markets.

At its core, the rally in developed markets is based primarily on faith in Janet Yellen’s clarified and renewed comments that interest rates would remain low for an extended period. There is also faith by investors that spring will bring improved economic data while early earnings news is well-received.

As a consequence some selling is taking place overseas with proceeds finding their way back primarily to U.S. markets. Earnings news from Netflix (NFLX), Home Depot (HD), Harley-Davidson (HOG) and United Technologies (UTX) beat expectations on top and bottom lines. Meanwhile, and not unusual in this “go-go” environment, companies with poorer results like McDonalds (MCD) are ignored.

Economic data included FHFA Home Price Index rose to 0.6% vs prior 0.3%; Existing Home Sales were unremarkable at 4.59M vs 4.60M; and, Richmond Fed Index rose substantially to 7 vs prior -7.

In fact as spring offers better weather it wouldn’t surprise that Existing Home Sales might increase given pent-up demand, newly loosened mortgage standards and low mortgage rates.

There’s always some bad news under the carpet as it’s being reported by the WSJ that Student Loan forgiveness is growing at 40% and has surged to $72 billion. The article also asserts that easy Student Loan policies are driving up college costs. Another story under the headlines is 600 U.S. troops are heading to Europe to stage training exercises to theoretically counter Russian moves. But, alas, these worries are for another day.

Leading market sectors higher included: Tech (QQQ), Small Caps (IWM), Financials (XLF), Healthcare (XLV), Consumer Discretionary (XLY), Retail (XRT), Small Cap Value (VBR), Homebuilders (ITB), Transports (IYT), Solar (TAN), Australia (EWA), Base Metals (DBB) and Silver Miners (SIL).

Leading market sectors lower included: China (FXI), Japan (EWJ), Hong Kong (EWH), Indonesia (IDX), Turkey (TUR), Chile (ECH), Gold (GLD) and Crude Oil (USO).

Volume was once again quite light but breadth per the WSJ remains positive.

4-22-2014 6-32-19 PM diary

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

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

  • XLF WEEKY

    XLF WEEKY

  • IBB WEEKLY

    IBB WEEKLY

  • XLY WEEKLY

    XLY WEEKLY

  • XRT WEEKLY

    XRT WEEKLY

  • XLB WEEKLY

    XLB WEEKLY

  • XLV WEEKLY

    XLV WEEKLY

  • XLE WEEKLY

    XLE WEEKLY

  • ITB WEEKLY

    ITB WEEKLY

  • TAN WEEKLY

    TAN WEEKLY

  • ICF WEEKLY

    ICF WEEKLY

  • TLT WEEKLY

    TLT WEEKLY

  • UUP WEEKLY

    UUP WEEKLY

  • FXE WEEKLY

    FXE WEEKLY

  • FXA WEEKLY

    FXA WEEKLY

  • FXY WEEKLY

    FXY WEEKLY

  • GLD WEEKLY

    GLD WEEKLY

  • SLV WEEKLY

    SLV WEEKLY

  • DBB WEEKLY

    DBB WEEKLY

  • USO WEEKLY

    USO WEEKLY

  • DBA WEEKLY

    DBA WEEKLY

  • DBC WEEKLY

    DBC WEEKLY

  • EFA WEEKLY

    EFA WEEKLY

  • VGK WEEKLY

    VGK WEEKLY

  • EWA WEEKLY

    EWA WEEKLY

  • AAXJ WEEKLY

    AAXJ WEEKLY

  • EEM WEEKLY

    EEM WEEKLY

  • EWJ WEEKLY

    EWJ WEEKLY

  • TUR WEEKLY

    TUR WEEKLY

  • EWZ WEEKLY

    EWZ WEEKLY

  • RSX WEEKLY

    RSX WEEKLY

  • EPI WEEKLY

    EPI 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

Gilead Sciences (GILD) rises sharply on Hepatitis C drug while Amgen (AMGN) falls on weaker earnings.

Earnings reports are doing what they generally do, beat much lowered estimates. Nothing new about that.

PMI Manufacturing Index Flash, New Home Sales and Energy Inventories are on tap for Wednesday.

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
Gold %
WTI Crude Futr101.23-0.52-0.51 %05:52
Index Quotes Change Change % Local
CRB311.210.640.21 % 17:28
US Dollar79.990.010.01 % 16:59
Index Quotes Change Change % Local
VIX13.19-0.06-0.45 %04/22
MSCI Value Daily MTD YTD
Brazil2333.115-0.58 %3.15 % 5.18 %
Russia644.792-0.40 %-4.22 %-18.06 %
India437.606-0.75 %-0.38 %7.44 %
China59.688-0.32 %0.48 % -5.41 %