Turnaround Tuesday Hits Markets
0
May 03, 2016

Over the past few weeks’ stocks have rallied, more or less, on light volume.

Monday was an excellent example as only 60M SPY shares traded as stocks rose.

But Tuesday markets turned around on much heavier volume (over 100M shares) which repeats distribution on selling days with light volume on rallies. Most experts agree Monday’s rally was likely due to reinvestment of dividends as the month began. Further, I believe, Bank of America suggested recent market buyers were mostly pension funds as other investors stood aside.   

It may be that reality bites caught up with investors. This day a host of negative data swamped any “bad news is good” data. China reported weaker economic conditions even as the government asked the country’s media to shine a more positive light on conditions. For example, Markit reported PMI as only 49.4 while the government stated PMI was a brighter 50.1 (anything over 50 is positive). European economic growth weakened; oil prices fell on perceived weakening demand; and, AIG reported disappointing earnings.

So, stocks gave up Monday’s gains, and then some while the dollar rallied which also undid gains (commodities) linked to its previous weakness.

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).

 5-3-2016 3-30-54 PM

Volume was much heavier by recent standards and breadth was negative.

5-3-2016 3-36-22 PM Diary

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

 

 

 

5-3-2016 3-38-47 PM EWZ

 

 

 

 

 

 

 

 

 

 

Charts of the Day
  • SPY 5 MINUTE

    SPY 5 MINUTE

  • SPX DAILY

    SPX DAILY

  • SPX WEEKLY

    SPX WEEKLY

  • INDU DAILY

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  • INDU WEEKLY

    INDU WEEKLY

  • RUT WEEKLY

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  • NDX WEEKLY

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  • XLE WEEKLY

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  • XLV WEEKLY

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  • IBB WEEKLY

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  • TLT WEEKLY

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  • UUP WEEKLY

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  • FXE WEEKLY

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  • FXY WEEKLY

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  • FXA WEEKLY

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  • FXB WEEKLY

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  • GLD WEEEKLY

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  • USO DAILY

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  • DBA WEEKLY

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  • DBC WEEKLY

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  • EFA WEEKLY

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  • IEV WEEKLY

    IEV WEEKLY

  • EEM WEEKLY

    EEM 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. 

 

My view is Monday’s light volume rally reflected little enthusiasm for any follow-through. But that’s obvious. Where we’re going from here is anyone’s guess. “Sell in May and go away” is as good a guess as any.

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

 

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
Gold1,212.402.600.22 % 08:15
WTI Crude Futr29.10-0.34-1.15 %16:22
Index Quotes Change Change % Local
CRB158.87-1.50-0.93 %16:28
US Dollar96.900.150.16 % 16:42
Index Quotes Change Change % Local
VIX24.11-1.29-5.08 %16:14
MSCI Value Daily MTD YTD
Brazil953.9610.36 %-0.52 %-7.94 %
Russia376.0882.60 %-6.20 %-7.08 %
India405.4322.63 %-5.21 %-11.78 %
China49.5613.54 %-4.42 %-16.57 %