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March 08, 2016

Dear members and readers.

Update: Dave's Daily posting will be intermittent this week as Dave is recovering from injuries as a result of a fall last week. His doctors are optimistic as this will prevent him from raging at the tape and market. Premium members will continue to receive the daily HI/LO Indicators and updated stops on current positions. He is appreciative and grateful for all the well-wishes and outpouring of caring support sent from many of you. Thank you.  ETF Digest admin team

 

3-8-2016 3-27-46 PM

 “You can check out any time you like, but you can never leave.”

That seems the way bots have programmed markets to suit their needs, but that doesn’t make market action any less bizarre or Orwellian. Just sayin’…

It may be a blessing for bulls to see a sell-off in stocks to put a dent in the severe overbought conditions we’ve been posting for the past few trading days. On the one hand bulls can get values back to more reasonable levels given other considerations (weak economic and earnings data) while bears can start to make their case again the rally is based on a rise in crude oil prices only and little else. Even today, the IMF has warned the global economy is “..clearly at a delicate juncture, where risk of economic derailment has grown.” As to the latter, it’s been whispered that banks are buying crude oil and energy stocks to protect themselves from massive collateral failures in debt they’re exposed to. I don’t know if that’s true but it makes some sense. And, it’s not just U.S. banks with this exposure, so too are international banks, funds and many others.

Stocks fell sharply at the open then rallied once Europe closed again and trading bots rushed in to defend their long positions. By the end of the trading day stocks, commodities (oil in particular) fell after making back some the large portion of early losses.

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).

3-8-2016 3-28-42 PM

Volume increased on Turnaround Tuesday as selling seized the tape. Breath per the WSJ was negative.

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3-8-2016 3-30-14 PM

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

 

 

 

3-8-2016 3-34-56 PM USO

 

 

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

  • KRE WEEKLY

    KRE WEEKLY

  • XLI WEEKLY

    XLI WEEKLY

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    XLY WEEKLY

  • XLU WEEKLY

    XLU WEEKLY

  • ITB WEEKLY

    ITB WEEKLY

  • IYT WEEKLY

    IYT WEEKLY

  • TLT WEEKLY

    TLT WEEKLY

  • UUP WEEKLY

    UUP WEEKLY

  • FXY WEEKLY

    FXY WEEKLY

  • FXE WEEKLY

    FXE WEEKLY

  • GLD WEEKLY

    GLD WEEKLY

  • GDX WEEKLY

    GDX WEEKLY

  • DBB MONTHLY

    DBB MONTHLY

  • DBA WEEKLY

    DBA WEEKLY

  • 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.

  • NYMO DAILY

    NYMO DAILY

  • 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. 

Moving from extremely overbought to just plain overbought is still overbought. Hmm, is that too many overboughts? Anyway, it was just a matter of time before markets came down near earth.

Who knows what tomorrow will bring? One thing in the future that stands out is next week’s Fed Meeting. It sees bulls may be confident there will be no more interest rate hikes in the near term.

Wednesday provides the EIA Petroleum Report. Given recent trends, this will be much watched.

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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