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Just A Dead Cat Bounce?
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February 16, 2016

DEAD-CAT-BOUNCE

Well, maybe so.

Was there any news to stimulate this action Tuesday? Hmm, oil down? Yep.

Economic data weak again? Yep, but you may be into that bad-news-is-good nonsense.

Let’s see, Empire State Mfg Survey -16.64 vs -10 expected & prior -19.37 isn’t good unless you’re into, it could’ve been worse; and, Homebuilders Sentiment falls again to 58 vs 61 expected & prior 61. Not good.

Deutsche Bank begs for central bank intervention to save its hide. Is that good? Maybe. It depends on your point of view.

The ECB’s Draghi has repeated more of his, “we’ll do everything line again” to get European markets moving higher again. Is that a good thing? Hollow words?

European markets loved it to start the week. Turkey to invade Syria means it must confront Russia and Iran with the Saudis in the wings. This might not end well.

Oh, but wait, it’s that stock buyback deal once again as IBM and Apple launch major debt sale (approximately $16 billion?) to buyback shares. Well, that’s the ticket as before! Investment grade bond debt now getting stretched? Yep.

I suppose you should just assert the tape is the tape and not argue with it. That’s what a good trader should do, right? Sure, but we’ve entered a new Orwellian environment so it’s hard to make sense of things now.

Grabbing at straws, the official line for the day was “Socks Gain on Rally in Battered Sectors”. This means energy, small caps, biotech, banks, retail and so forth. Sectors declining include everything that had rallied the past two weeks including; Treasury Bonds, precious metals, crude oil and so forth.

Market sectors moving higher included: Most equity sectors.

Market sectors moving lower included: See above.

Below is the heat map from Finviz reflecting those ETF market sectors moving higher (green) and falling (red). Dependent on the day (green) may mean leveraged inverse or leveraged short (red).

2-16-2016 2-35-10 PM

Volume again was quite light compared to prior heavy volume distribution days. Breadth per the WSJ was quite positive.

2-16-2016 2-49-20 PM

12-17-2015 9-04-44 PM Chart of the Day

 

 

 

 2-16-2016 3-02-28 PM IBB

 

 

Charts of the Day
  • SPY 5 MINUTE

    SPY  5  MINUTE

  • SPX DAILY

    SPX DAILY

  • SPX WEEKLY

    SPX WEEKLY

  • INDU DAILY

    INDU DAILY

  • INDU WEEKLY

    INDU WEEKLY

  • RUT WEEKLY

    RUT WEEKLY

  • NDX WEEKLY

    NDX WEEKLY

  • TLT WEEKLY

    TLT WEEKLY

  • GLD DAILY

    GLD DAILY

  • USO MONTHLY

    USO MONTHLY

  • EWG WEEKLY

    EWG WEEKLY

  • EEM WEEKLY

    EEM 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 has changed due to a variety of new factors including HFTs, new VIX linked ETPs and a multitude of new products to leverage trading and change or obscure prior VIX relevance. 

Markets still remain volatile two-way action. It’s been hard for traders to find any durable, longer than a couple of days, to hold positions using reasonable stops.

I believe bulls are just waiting for some sign from the Fed that they have traders’ backs. That of course, is not the Fed’s role but they’ve made it so.

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.

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Top 25 Best ETF Newslettersin 2015.

ETF Digest was awarded one of the most informative ETF websites in the10th Annual Global ETF Awards.



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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

 

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