April 29, 2009

Stock markets spiked higher early and added to the momentum after the Fed non-announcement. However, there was plenty of profit-taking from the highs of the day into the close.

Typically a Fed-day yields heavy volume but that wasn’t the case today as volume remained relatively light. Breadth was extremely positive.

Markets never make sense and this is when hindsight kicks-in to provide logic. You get terrible GDP data (dare we say “worse than expected”) and you’d think well, that’s it for this rally. But, the bulls still have the tape. They looked inside the numbers and spun low inventory data as bullish since businesses will have to restock. Or will they? That’s not for us to say.

Furthermore, it’s the end of the month and time to get out the green paint to produce some good results for clients.

All this is why, despite negative, nay cynical, opinions we invest systematically since trying to make fundamental sense of current events only yields frustration and few profits.

I have a request for Vietnam. Now there isn’t an ETF yet but Van Eck has one in registration. It’s probably the most sought after country market for which requests are received. I can post the weekly chart of the main index below from my internal charts. For now this is the best I can do.

The low volume rally continues apace. Current bullish participants are hopeful retail investors will start phoning their advisors to put money to work in the markets. But, many are still pretty shell-shocked by the devastation done to their portfolios and are reluctant to act. Who can blame them?

I’m more interested in the market action tomorrow and Friday to see if bulls can keep it together. No doubt the “sell in May and go away” mantra will be repeated often. If this market is more like 2003 then buying in May was the right thing to do despite the news at the time.

Let’s see what happens.

Disclaimer: Among other issues the ETF Digest maintains positions in: SPY, MDY, IWM, QQQQ, IGN, IGM, XLI, XLY, XLB, XLF, IYR, DVY, DBV, DBC, DBB, DBA, MOO, EFA, EEM, ILF, IEV, EWJ, EWA, EWW, EWY, EWZ, IFN and FXI.

The charts and comments are only the author’s view of market activity and aren’t recommendations to buy or sell any security. Market sectors and related ETFs 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 annotations aren’t predictive of any future market action rather they only demonstrate the author’s opinion as to a range of possibilities going forward. Further details, including recommendations, are available to subscribers at www.etfdigest.com.

Last 5 posts by David Fry

• MARKET COMMENT October 22, 2009 DRIVE-THRU SOUP KITCHEN 2009 So, what the hell was yesterday about anyway? - October 22nd, 2009
• MARKET COMMENT October 20, 2009 TAKING A BREAK It was a pretty strange day. - October 20th, 2009
• MARKET COMMENT October 13, 2009 EARNINGS WORRY WARTS I just have a spooky feeling but then I always do. - October 13th, 2009
• MARKET COMMENT October 8, 2009 GETTING SOME ALTITUDE SICKNESS YET? - October 8th, 2009
• MARKET COMMENT October 2, 2009 REALITY BITES BULLS Economic reality is meeting bullish enthusiasm and the results are disappointing and upsetting. - October 2nd, 2009