CENTRAL BANKS TAKE CHARGE OF THE TAPE / DAVE´S DAILY

Central Banks Take Charge Of The Tape

 

The ECB is rumored, due to little bond supply to buy stocks with their QE program. Doing so would copy Japan’s BOJ who make no secret of buying stocks to support markets. Now China’s PBOC and acknowledging a weak economy, cut interest rates. And, after outlawing shorting, and even conventional selling, now markets are no legitimate two-way trading affair.    

It doesn’t matter that an overwhelming majority of pundits claim the U.S. central bank dare not raise interest rates. They’ve been saying they will do so, and do so this year. Isn’t their credibility is at stake?

Bottom line, central banks are in charge and want markets higher period.

This week many market sectors have heeded central bank’s not so subtle mandates leading to almost panic buying for stocks. Many sectors have moved into green for the year.

It’s been quite a spectacle as overall earnings and ongoing economic data have been weak and are cast aside.

As I and many others have asserted, the stock market is not the economy and this has never been truer than now.

Market sectors moving higher included: Mostly everything.

Market sectors moving lower included: Commodities (DBC), Crude Oil (USO), Base Metals (DBB), Gold (GLD), Treasury Bonds (TLT), Euro (FXE), Yen (FXY), REITs (IYR), Utilities (XLU), Retail (XRT), Energy Stocks (XLE) and so forth.

The top ETF daily market movers by percentage change in volume whether rising or falling is available daily.
Volume was higher and breadth per the WSJ was positive.

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Most market sectors weren’t trending the same on Monday. Weaker markets are so due to perceived weak economic demand from China despite some reports being better than expected.

More earnings data on the way throughout the week which should be telling since most reports have been marked much lower. How much these are beaten remains the issue for bulls.

It seems a little early to wait on the Fed already. Nevertheless that’s what it seems like.

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. He is listed as one of 22 experts you need to follow on Twitter. ETF Digest was named one of the most informative ETF websites in the 10th Annual Global ETF Awards.

Charts of the Day

Major U.S. Markets (7)
U.S. Market Sectors & ETFs (14)
Bonds (2)
Commodity & Currency ETFs (9)
International & Emerging Market ETFs (13)
$NYMO (1)
$NYSI (1)
$VIX (1)

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• 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

  
  
  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

  
  
  The VIX is a widely used measure of market risk and is often referred to as the "investor fear gauge". Our own interpretation is highlighted in the chart above. The VIX measures the level of put option activity over a 30-day period. Greater buying of put options (protection) causes the index to rise.
  
  

 

I’ve not much to add as the tape is doing all the talking and should be respected despite any negative opinions anyone, including me, might have.

 

Let’s see what happens.