Mr. Market - The Great Pretender
August 18, 2016

Oh yes, that seems to fit Mr Market’s mood these days.

Too cynical a description you say?

Maybe so, but finding the reality of market conditions is a challenge these days.

The past few weeks allowed some crazy two-way action in energy markets. Oil prices plummeted early in the month on oversupply conditions. Then, just as markets got hip to those conditions, they reversed direction sharply rallying fresh highs. Why was this? Apparently bulls were able to dust-off the reliable canard—suppliers were now going to reduce production. And so what was previously uncritical suddenly (sigh) became credible once again.

So weak sectors in markets became strong once again lifting them once again. And this allowed for more sector sectors renewed the trading places game once conditions to resume confusing markets.

Retail sectors took it on the chin this week as earnings reports were dismal. To add to the mystery for investors small caps jumped higher as leadership rotated once again.

Not to be left out were talking heads from our friends at the Fed. They just can’t seem to shut up these days since they refuse to yield the conversation away from themselves. Yesterday it was Fed Gov. Bullard’s comments who allowed markets a late day boost and today it was Fed Gov. Dudley (Do-right) who grabbed the microphone to tell one and all things in the future were going to better. How much so? Well, he chastised traders to not to misunderstand the Fed’s guidance. Whatever that might mean. 

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).

8-18-2016 3-50-20 PM

Volume was ultra-light which isn’t even fitting tor a summer trading day. Breadth per the WSJ was positive.

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





Charts of the Day












    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.



    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.




    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. 

The last two charts present a dangerous condition of high complacency and much overbought conditions.

This tells you all you need to know about how I feel about, and would approach investing in these markets.

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.

Named in the Top 10 ETF Blogs Every Serious ETF Investor Should Read in 2016.

Named as one of the Top 22 ETF Experts You Need To Follow on Twitter for continuing to deliver high quality analysis and commentary through the ETFDigest Twitter feed.

ETF Digest was named in the Top 50 Investing Blogs.

Ranked #16 in the Top 25 Best ETF Newsletters in 2015.

ETF Digest was awarded one of the most informative ETF websites in the 10th Annual Global ETF Awards.


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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


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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 %