David Fry's Market Outlook for Wednesday

SPIDERMAN SPOTTED IN CHINA!!!!

Does the image above mean anything? Nope, not a damn thing! I just thought it was cool. No wait, the U.S. and China are holding trade talks and maybe something good will come of it. Does that connect? Nope. How about high risk diplomacy? Or high risk Chinese stocks and ETFs? Well... let's just say I liked the image and leave it at that.

Meanwhile small-caps and techs again had a better day than the DJIA. Is this a trend? Nope. Let's give it more than two days.

Alright, that’s enough about tech and our stuff. Elsewhere, we look to the usual suspects to sense the mood and get a feel for the future.

Around the globe the big news is what will come of the Chinese/U.S. trade talks?

I think the trade talks end Wednesday and both sides want trade peace. The Chinese sense a growing level of protectionism in U.S. politics, and should extend an olive branch to quell this mood.

You can tell we're focused on small-caps and tech closely right now. If the market should continue higher, these two sectors should follow along. If they don’t, it just means we’re in a “deal market” with future earnings taking a back seat. That would mean when the music stops, the party’s over.

Disclaimer: Among other issues, the ETF Digest maintains long or short positions in: iShares Russell 2000 Index ETF (IWM), NASDAQ 100 Trust Shares ETF (QQQQ), iShares Goldman Sachs Technology Index Fund (IGM), Ultra Technology ProShares (ROM), First Trust DJ Internet Index ETF (FDN), PowerShares Dynamic Software (PSJ), streetTRACKS Gold Trust ETF (GLD), PowerShares DB Energy Fund (DBE), PowerShares DB Commodity Index Tracking Fund (DBC), Rydex S&P Equal Weight Consumer Discretionary ETF (RCD), streetTRACKS KBW Bank (KBE), iShares Trust FTSE-Xinhua China 25 Index Fund (FXI), iShares MSCI Hong Kong (EWH), iShares MSCI EAFE Index Fund ETF (EFA), iShares MSCI Emerging Markets ETF (EEM), iShares S&P Latin America 40 Index Fund (ILF) and iPath MSCI India ETN (INP).