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February 29, 2016

As you might recall crude oil the past two weeks was 90% correlated to stock market trends. With oil up over 2% Monday the relationship may be changing some as stocks fell to close the month near what I had described as almost right on my forecast for the S&P 500 at 1956.00. The market exceeded this level slightly last week.

Not to belabor the headline but economic data Monday was, well, terrible this day. Chicago PMI Index fell below 50 to only 47.6 vs prior 55.6. (Remember a reading below 50 indicates severe economic contraction. The Dallas Fed Mfg Survey fell once again to -8.5 vs prior -10.2 and Pending Home Sales dropped to -2.9% vs prior 0.9%. None of this was good obviously.

As indicated oil prices rose as the Saudis, given the headline, said they’d cooperate now with their peers who wish to stabilize prices. That was humorous since they just said last week they wouldn’t do that in no uncertain terms. Well, if they will cooperate that just opens the door to cheating which is just the way they’ve always rolled.

Countries dependent on oil prices moving higher rallied especially with emerging markets. Bonds overall were stronger while the commodity complex rallied. The S&P 500 closed the third straight month lower by just 0.4%. Stocks closed lower on the day helped by a weaker overbought condition as noted by the trusty McClellan Oscillator (NYMO).

Market sectors moving higher included: Volatility (VIX), Bonds (TLT), Junk Bonds (HYG), Emerging Markets (EEM), Brazil (EWZ), Russia (RSX), Mexico (EWW), India (EPI), South Korea (EWY), Malaysia (EWM), Africa (EZA), Gold (GLD), Gold Stocks (GDX), Oil (USO) and Silver (SLV).

Market sectors moving lower included: S&P 500 (SPY), Dow (DIA), Nasdaq (QQQ), Healthcare (XLV), Biotech (IBB), Energy (XLE), Financials (XLF), Banks (KBE), Industrials (XLI), Materials (XLB), Homebuilders (ITB), European Union (EZA), Germany (EWG), Japan (EWJ), Euro (FXE) and Shanghai (ASHR).

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).

 2-29-2016 3-14-40 PM

Volume was about average for the day and breadth per the WSJ was mixed to negative.

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 2-29-2016 3-17-25 PM1

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

 

 

 

  2-29-2016 3-22-42 PM EEB

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

  • XLE WEEKLY

    XLE WEEKLY

  • XLF WEEKLY

    XLF WEEKLY

  • KBE WEEKLY

    KBE WEEKLY

  • XLV WEEKLY

    XLV WEEKLY

  • IBB WEEKLY

    IBB WEEKLY

  • TLT WEEKLY

    TLT WEEKLY

  • UUP WEEKLY

    UUP WEEKLY

  • FXE WEEKLY

    FXE WEEKLY

  • FXB WEEKLY

    FXB WEEKLY

  • FXY WEEKLY

    FXY WEEKLY

  • GLD WEEKLY

    GLD WEEKLY

  • GDX WEEKLY

    GDX WEEKLY

  • SLV WEEKLY

    SLV WEEKLY

  • DBB MONTHLY

    DBB MONTHLY

  • USO MONTHLY

    USO MONTHLY

  • EWZ MONTHLY

    EWZ MONTHLY

  • RSX MONTHLY

    RSX MONTHLY

  • 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 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. 

With the NYMO still showing overbought levels perhaps we could continue lower until this reading moves lower. The bad economic news Monday finally affected markets Monday as declines there were severe.

This week is full of important data with Tuesday featuring PMI Mfg Index, ISM Mfg Index and Construction Spending. The week winds up with the all-important, if not silly, Employment Report. In between is plenty of other market moving economic reports.

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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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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