Welcome Guest
 
Turnaround Tuesday Leaves Headline Writers Breathless
0
March 01, 2016

3-1-2016 2-39-56 PM sEPIA

I suppose many younger readers don’t know who Jim Finlayson is pictured above. He was the original “D'oh!” guy from Laurel & Hardy films. It’s appropriate to display him Tuesday given how weird today’s rally was. 

As ZH pointed out this morning at 10 AM and again at 11 AM, two conflicting headlines attempted to explain Tuesday’s rally. The first was based on hope while the second just an hour later was just a lie.

Sign up to become a premium member of the ETF Digest and receive more of our detailed charts with actionable alerts.

You can follow our pithy comments on twitter and like us on facebook.

 

 

 

 Tuesday, March 1 10:00 am EST

3-1-2016 2-48-11 PM REUTERS 1

Tuesday, March 1 11:41 am EST

3-1-2016 3-49-32 PM Reuters 3

3-1-2016 2-52-04 PM

 

 

 

 

 

 

 

 

 

 

Huh?

Let’s look at the data this day. PMI Mfg Index fell to 51.3 vs prior 52.4; ISM Mfg Index was still weak and below 50 at 49.5 vs 48.5; Construction Spending was higher at 1.5% vs 0.6%. That’s better but it was led by primarily highway and road construction given better weather. And, we should remember the weak data from Monday and the litany or prior weak reports. In fact PMI readings globally are very weak.

Nevertheless, stocks soared higher given another massive short squeeze as TPTB ignored most data once again.

I still believe markets are similar to the movie plot from The Big Short where shorting mortgage-backed derivatives by the major players was initially wrong as markets continued to rally against them. Eventually they were proven correct in a major way and the rest is history. This too is what’s happening in markets in my opinion. If I’m wrong, you won’t recognize the study of finance in the future.

Another reason for the rally as bulls grasped at straws was a small increase in oil prices. Russia announced that they and others would freeze production at current levels. That’s amusing since current production is the reason prices are so low. That said, everything was higher each pulling the other along.

Market sectors moving higher included: Just about everything.

Market sectors moving lower included: Bonds (TLT), Gold (GLD) and Volatility (VIX)

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).

3-1-2016 2-52-45 PM

Volume was about average by recent data and breadth per the WSJ was positive.

3-1-2016 2-54-09 PM

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

 

 

 

3-1-2016 3-04-46 PM IBB

 

Charts of the Day
  • SPY 5 MINUTE

    SPY  5  MINUTE

  • SPX DAILY

    SPX DAILY

  • SPX WEEKLY

    SPX WEEKLY

  • SPX MONTHLY

    SPX MONTHLY

  • INDU DAILY

    INDU DAILY

  • INDU WEEKLY

    INDU WEEKLY

  • RUT WEEKLY

    RUT WEEKLY

  • XLE WEEKLY

    XLE WEEKLY

  • XLF WEEKLY

    XLF WEEKLY

  • KBE WEEKLY

    KBE WEEKLY

  • XLY WEEKLY

    XLY WEEKLY

  • XRT WEEKLY

    XRT WEEKLY

  • ITB WEEKLY

    ITB WEEKLY

  • IYR WEEKLY

    IYR WEEKLY

  • XLU WEEKLY

    XLU WEEKLY

  • IYT WEEKLY

    IYT WEEKLY

  • HYG WEEKLY

    HYG WEEKLY

  • TLT WEEKLY

    TLT WEEKLY

  • UUP WEEKLY

    UUP WEEKLY

  • FXE WEEKLY

    FXE WEEKLY

  • GLD WEEKLY

    GLD WEEKLY

  • DBB MONTHLY

    DBB MONTHLY

  • USO MONTHLY

    USO MONTHLY

  • EFA WEEKLY

    EFA WEEKLY

  • IEV WEEKLY

    IEV 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. 

 

I listened to Alan Greenspan speaking with Bloomberg today (yes, really I did!) and when asked if he was optimistic going forward he said, “I’ve not been optimistic for a long time.”  He also cited negative China data which he said the slowdown there will only grow. That said, it was announced today 6M Chinese would quickly be receiving pink slips. That’s a lot by US standards but just a small city there.

API reported crude inventories after the close of trading rising by 9.9M bbls vs prior at 3.3M bbls the largest since 2015. So the rally in crude at least should be squished tomorrow.

Tuesday was highlighted by the world’s worst economic data in 4 years and the best rally day in 6 months. Only on Wall Street can you make this stuff up.

Wednesday features ADP Employment results along with the Beige Book.

Let’s see what happens. 

Headshot David Fry xsmall

Dave Fry is founder and publisher of ETF Digest and has been covering U.S. and global ETFs since 2001.

Top 50 Investing Blogs.

Top 25 Best ETF Newslettersin 2015.

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



Archives
Disclaimer

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