David Fry's Market Outlook for Tuesday

Without much negative news from the usual suspects [subprime, energy, the dollar and so forth], stock prices were able to rise as buyouts continued and Merck beat earnings estimates. Once again, beneath the headline number, breadth sucked.

From the table above, the divergence is plain to see, making the 92 point DJIA and 7 point S&P 500 rise misleading. And, for a Monday in July, volume in some sectors was decent.

Meanwhile, overseas things are still smokin'.

You'd never know there were any divergences or stock distribution going on by looking at hot overseas markets. Nor would you suspect any with U.S. markets so strong. But let's just chalk one up for the bulls and see if this problem goes away.

Disclaimer: Among other issues the ETF Digest maintains long or short positions in: S&P 500 Index (SPY), NASDAQ 100 Trust Shares ETF (QQQQ), iShares Goldman Sachs Technology Index Fund (IGM), iShares Goldman Sachs Network Index Fund (IGN), First Trust DJ Internet Index ETF (FDN), PowerShares Dynamic Semiconductor (PSI), PowerShares DB US Dollar Index Bearish (UDN), streetTRACKS Gold Trust ETF (GLD), PowerShares DB Precious Metals Fund (DBP), PowerShares DB Base Metals Fund (DBB), United States Oil Fund ETF (USO), PowerShares DB Energy Fund (DBE), Rydex S&P Equal Weight Consumer Discretionary ETF (RCD), iShares Dow Jones US Real Estate ETF (IYR), streetTRACKS KBW Bank (KBE), Financial Select Sector SPDR ETF (XLF), iShares MSCI Emerging Markets ETF (EEM), iShares MSCI Brazil Index ETF (EWZ), Market Vector Russia ETF Trust (RSX), iPath MSCI India ETN (INP), iShares Trust FTSE-Xinhua China 25 Index Fund (FXI), iShares MSCI Australia Index Fund (EWA), iShares MSCI South Korea Index Fund ETF (EWY), iShares MSCI Japan Index ETF (EWJ) and Turkish Investment Fund Inc. (TKF).