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October 29, 2009


Even Superman is no market fortune teller. But, with the McClellan Oscillator as low as we’ve outlined the past two days, the end of month at hand for portfolio “window dressing”, and “dip buyers” at the ready, it didn’t take much brilliance to expect this kind of outcome.

We actually put a few small short positions on today and kept them that way given the likelihood of a day like today. So the GDP data came in better than expected and the media was shouting from the rooftops the recession is over. Maybe it is, but looking past the headline number it’s apparent the upbeat result was impacted by two “one time” occurrences—“cash for clunkers” and the first-time home-buyers tax credit. The former probably won’t be repeated and a repeat for the latter is uncertain.

Nevertheless, the headlines are what counts and up we went but again, on lighter volume. This pattern is getting tiresome and you’d think wise pros would find it disturbing. Breadth was very positive.

click to enlarge

And, Dave Hurwitz offers his analysis of just the NYSE below. You’ll note we almost had a 90/10 day the other way but on lower volume than yesterday.

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