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If investors were only reading fundamental economic news, they'd be running for the hills. But that's not the way this market rolls, for the worse the data, the better or bullish are markets. Of course, this is about the durability of QE from the Fed and other central banks. You might just as well put away the "taper caper" for now since the Fed isn't going to reduce asset purchases when economic data is this consistently dreadful. (Oh wait, I wrote this too soon. Fed Governor John Williams spoke, saying the Fed "may reduce QE this summer but that slowing QE wouldn't be tightening. Up is down, down is up. D'OH!!)

Thursday stocks shook off the crummy data early as the litany of economic reports, well, sucked. Market veterans take note; the chart below courtesy of Zero Hedge speaks volumes about the disconnect between economic

Confidence is what gives currencies their credibility. The U.S. dollar went off the gold standard with the Bretton Woods's agreement during the Nixon administration. This occurred because more dollars were being printed than there was gold to back them (55% to 22%). Taking the U.S. off the gold standard the BWE made the dollar the world's reserve currency. This meant many commodities were priced in dollars. Some currencies were permitted to float freely while others maintained a "currency peg" to the dollar. As of late 2012 according to the IMF, the U.S. Dollar is still nearly 70% of foreign reserve holdings.

With expansionary dollar monetary policies post the 2001 and then 2008 bear markets investors became more wary of dollar holdings given supply. And, this sentiment was transferred later to other fiat (paper money) currencies in general as euro zone debt issues surfaced. For U.S. citizens' purchasing power is being

Dave Fry, Publisher ETF Digest

The ETF real estate sector is primarily dominated by Real Estate Investment Trusts (REITs). In turn, most REITs are focused on commercial real estate sectors including office, shopping malls, hospitality, and to a lesser extent, residential real estate via multi-family housing. Though beyond multi-family housing, it would be misleading to believe the sector has any primary focus on residential issues. At the end of the day, large private venture capital firms control most of the multi-family housing niche.

The real estate sector has about 17 domestic ETFs devoted to the space and continues to be popular with investors believing the sector adds a level of diversification to their investment portfolio. However, given Quantitative Easing, or QE, the reality is the real estate sector has provided very little diversification, given that REIT-based ETFs are trending in the same direction as most equity sectors.

Additionally, Zero Interest

Consumer Staples are considered a more conservative and defensive sector. After all, no matter the economic conditions, people still need "stuff" from soap to toothpaste. The earnings growth rate for these companies may be more limited due to intensive competition as big box retailers have forced prices lower squeezing margins. Big box retailers Wal-Mart (WMT), Costco (COST), BJ's (BJ) and others have also been able to dictate pricing terms to suppliers putting a squeeze on them as well. This has kept consumer prices lower, which is a good thing even though in so doing, it has forced smaller operations out of business.

A defensive sector like Consumer Staples will outperform when equity markets are more bearish and underperform when bullish. They will trend in the same manner overall, but still with less beta or volatility since as indicated, even the worst of times, people will need stuff. Currently, the sector

This posting features a comprehensive review of the high yield dividend ETF sector. This view features those dividend related ETFs that have a much more aggressive focus on dividends and yield versus more established sectors. Sometimes the focus on dividends to exclusion of other considerations can lead to trouble. Some of the higher yielding ETFs are sourced from more volatile areas of the world and may focus on previously more troubled sectors like financials where reliability of the dividend stream had been questioned.

In the U.S. and Europe for example, support for many financial institutions from central banks has allowed these institutions to survive the financial crisis thus far.

That said, there is a rapidly expanding list of ETFs from which to choose.

This is occasioned in part by equity market volatility leading investors to perceive safer havens especially money markets and high rated bonds. Low interest rates have combined

Our goal in this profile is to help investors wade through the many competing ETF offerings available. There are currently over 50 U.S. small-cap issues whether categorized as growth, value or blend. This is overwhelming for most investors. We try to help select those ETFs that matter even if they might be repetitive. The result is a more manageable list of issues from which to choose varying ETFs, perhaps by fees and history.

Our focus is to stick with the "blend" category since they should satisfy most investor needs. We believe these constitute the best index-based offerings individuals and financial advisors may utilize.

Uniquely, investors should remember: Small-cap issues usually carry higher beta (volatility or higher risk levels) than their large cap peers. This means during times of higher economic growth combined with accommodative Fed monetary policies returns in this sector should outperform larger cap issues. But, the opposite situation

This posting features a comprehensive review of the established dividend ETF sector. In this view we feature those dividend related ETFs that have a more conservative list of constituents and have been in existence for more than a few years. There are dozens within the category with more on the way. To simplify matters for investors we've whittled choices down to 10. The issues chosen represent a broad cross section of domestic, global, overseas, real estate (REITs) and other sectors from a variety of sponsors. Doing so makes sorting through the sector more manageable for most investors.

Within each category we filter them by placing importance on high assets under management, liquidity and/or strategies that make a difference being the most critical criteria. Newer issues tied to indexes with long (over 5 years) of historical data may be worth investigating, featuring and using indexes as alternative evaluations if the linked

I've known Kevin Rich since he was the lead person responsible for the creation and launching of Deutsche Bank commodity- and currency-based ETFs in 2006. These included popular DBC (DB PowerShares Commodity Tracking ETF), DBA (DB PowerShares Agriculture ETF), UUP (DB PowerShares Bullish Dollar Index ETF), and UDN (DB PowerShares Bearish Dollar Index ETF) among others. Kevin left the bank several years ago to create and launch an interesting new ETF. Kevin's new firm, Rich Investment Solutions, is the sub-adviser to a new fund off the same ALPS platform that has brought the select SPDRS series of ETFs and the Alerian MLP ETF AMLP.

Dave: So tell us about your new ETF. What is it exactly?

Kevin: Thanks, Dave. The fund is called the U.S. Equity High Volatility Put Write Index Fund, the symbol is HVPW. HVPW is an income generating fund. The fund creates income by selling 15%

More Top Ten ETFs

The technology sector is where the U.S. still leads the world in product innovation and distribution. Certainly the manufacturing of final products or hardware has moved overseas but world class product design and innovation continues to take place domestically.

During the first quarter of 2012 the technology sector was leading markets higher overall. This was especially so given Apple's (AAPL) rapid growth and overweighting in many tech indexes. …Apple's high weighting is a door that can swing both ways. When times are good for the company that enhances returns but should the stock price falter the opposite would hold true.

This was the comment I posted from last spring. ETFs with heavy weightings in Apple delivered outsized performance in the first quarter of 2012. However, as I mentioned earlier, the door can swing both ways, and this proved to be true in the fourth quarter of

Monday started off with bulls ramping stocks higher out of the gate. Then the Italian election results came out, and it doesn't appear likely that Berlusconi, Grillo, or Bersani will be able to form a coalition government. Worse was the result that there was no outcome, meaning the country had become ungovernable. (Wasn't that always the case?) But the stakes are high within the eurozone given coordinated efforts to deal with austerity and previous commitments. One sad aspect of the voting was the report that this was the lowest voter turnout since WWII. What does this reflect? Simply, voters feel helpless with the choices. (Let's not forget, this may apply to us as well.) Anyway, this event caused markets to abruptly reverse course. It created a bearish outside day technically when markets opened on their highs, then closed near the lows.

A chain reaction ensued, as investors suddenly remembered the

Negative trends continue following the FOMC Minutes release Wednesday afternoon. The "currency wars" continue to cause the dollar (UUP) to rise, which in turn caused commodities (DBC) to decline sharply. Investors in a more "risk-off" mood bought bonds (TLT) and even gold (GLD), if only modestly. It didn't help that U.S. Jobless Claims surged by 20K (362K vs. 341K previous) and Flash PMI was weaker (55.2 vs. 56.1 previous); Leading Indicators (.2% vs. .5% previous); Philly Fed readings (-12.5 vs. -5.8 previous); and Existing Home Sales were flat.

Overseas, German manufacturing slumped to 54.1 from 57.7, which was another blow to confidence.

I really don't need to repeat the accident-prone theme -- light volume glacial melt-up to overbought levels -- posted here since December. The convergences of many events including currency issues, Chinese economic policy confusion, sequester, and finally the Fed, that tipped it all over. Usually the longer

Markets were worried early in the day when another disappointing housing market report (Housing Starts) was released after Tuesday's Home Market Index disappointment. This combined data caused homebuilders (ITB) shares to fall sharply (-5.79%) after previous outsized gains.

In addition, "currency wars" are in full swing and this has caused the dollar (UUP) to rally. In turn, the dollar rally caused commodities, priced in dollars generally, to continue its decline along with corresponding ETFs including (DBC) -1.10%, base metals (DBB) -1.14%, copper (JJC) -1.54%, and gold (GLD) -2.51%. Crude oil (USO) -2.29% saw a two-second raid on markets from sellers as shown in the chart below near 11 AM.

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We've also seen some disturbing and extraordinary conditions develop between some markets. The following table and chart typifies how markets are becoming distorted most likely due to ZIRP and QE activity. Using poor Caterpillar (CAT) sales as an

Most fundamental news on the day was mixed. In Germany, Investor Confidence rose sharply to 48.2 vs. 31.5 previously, allowing eurozone stocks to rise. China stocks fell sharply as investors worried about The People's Bank of China (PBOC) taking away the punchbowl (liquidity) as the government frets about inflation and housing speculation.

The G20, amusingly and not surprisingly, gave member countries engaged in the so-called "currency war" (a trade war, really) a pass. It's a version of "don't ask, don't tell" via currency manipulation. It's okay to manipulate your currency, just don't tell anyone that's what you're doing. The very next day, the Swiss National Bank emerged, defending publicly their intent to keep manipulating the franc to "enforce the euro/franc floor with utmost determination." And, currency manipulation and Goldman Sachs (GS) (the vampire squid) has, per this clever expose, rigged the eurozone with its people running the

We've been worrying about the daily ultra-light volume market melt-up, since it made markets more accident-prone. Friday's mini-Black Swan event was a Wal-Mart (WMT) executive email leaked to Bloomberg lamenting the worst February sales in the past seven years, adding: "In case you haven't seen a sales report these days, February [month-to-date] sales are a total disaster," said Jerry Murray, a Wal-Mart vice president, in an email to executives obtained by Bloomberg." This set off an avalanche of selling just as traders were heading to the exits for the long weekend.

Given all the cheery spin with Friday's Consumer Sentiment (76.3 vs. 75 expected and prior 73.8) and Empire State Mfg Data (10.04 vs. -1.75 expected and prior -7.8), you'd hardly think consumers would be troubled. This is one reason why the U of Michigan Consumer Sentiment data is the least reliable in my view, because it values stock prices

If it wasn't transparent before, it is now: the Fed and other central bank policies are propping equity markets. On Thursday, countries within the eurozone reported terrible GDP data, missing most expectations. The litany read: Germany -.6%; France -.3%; Italy -.9%; and the EU -.6%. These are warnings of recession not seen since 2009. So despite all the money printing, bailouts, cover-ups, zero interest rates and at best, misleading statements of conditions, all this hasn't prevented the inevitable -- an economic decline. Little Iceland, with comparatively larger financial problems, met the challenge head-on, letting "too big to fail" banks fail. Now, they're on the path to a real recovery unencumbered by papered-over problems.

But today, U.S. stocks rose, seemingly unaffected by poor GDP data, including our own from the previous month. Stocks opened weak, but then saw immediate dip buying. This buying coincided with another Fed POMO action, which

Consumers seemed surprised by the extra bite taken out of their paychecks this last month, so much so, even McDonald's (MCD) and other fast food outlets saw sales slide. Consumers don't like seasonal record high gas prices at the moment either. Another tax on consumers would be to raise the minimum wage to $9.00 from $7.25, which would hit those "value meals."

This was all reflected in a poor Retail Sales report (.1% vs. .2% expected and prior .5%) and ex-Autos and Gas (.2% vs. .3% expected and prior .7%) and a slide in the Consumer Discretionary (XLY) sector. Business Inventories were also light (.1% vs. .3% expected and prior .3%); import prices increased .6%, while exports only .3%; and, energy inventories were bullish as stockpiles of crude, gas and distillates fell sharply.

Markets seem rather range bound and even tired as the recent melt-up starts to slow. These markets

Bulls remain undaunted by higher payroll taxes, overbought conditions or much else. They worked hard to turn the week "green" for major indexes. The headline writers are quite busy spinning the good news. One stated "Nasdaq Near 12-Year High". Oh brother, wake me when its 5000 vs. 3200.

Seeing that we're long, I shouldn't complain too much. The game hasn't changed. On one side are very smart and experienced people who are raging at the machine. Most are gray-haired veterans who think they've seen it all. (The truth is, they haven't.) The other side are the money printing central banks and ZIRP that make any choices beyond stocks seem dumb. That's it.

As I suggested a few days ago, you either stay on the sidelines armed with your experienced wisdom, or hold your nose and dive into equities. If you agree, then this should lead subscribers to our Lazy or

It doesn't surprise me that volatility is increasing as many indices are trying to take out previous highs. These levels clearly mark resistance and have been highlighted this way for the last month. The only exception has been small caps (Russell 2000: RUT), where weekly DeMark indicators have signaled exhaustion. But these indicators are in a fierce duel with liquidity injections, courtesy of the Fed's nonstop QE operations.

It was almost amusing to read the biggest Fed dove's remarks Thursday that the Fed's QE is like an "energy bar" that will drive unemployment to 7% by the end of 2013.

On the other hand, the Fed's Governor, Jeremy Stein, stated today: "…an extended period of low interest rates could create risks to financial stability, and policymakers should keep an eye on junk bond and leveraged loan markets for signs of excess risk-taking, and we are seeing a fairly significant

We've seen some great bullish returns from equities over the past month. It may be time for markets to take a breather and consolidate.

Nevertheless, the primary stimulus for growth remains Fed QE, to the tune of $85 billion per month. This liquidity has done what it's intended to do -- push stock prices higher. This is in contradiction to the Fed's announced intent (relieve unemployment and stimulate economic growth), but they "wink wink" know higher stock prices are the immediate result of these policies. It's quite foolish to fight this tsunami of liquidity. You can sit out the dance if you choose and rage at the machine from the sidelines (and many are), but shorting probably will cause you some pain.

That said, eventually like anything else, it will eventually end or even become tiresome and lose its impact.

To discover trend exhaustion, there are some useful technical

There wasn't much news Tuesday to ignite a rally, but bulls are still flying with the Fed the wind beneath their wings.

Yesterday's sell-off was left in the rear view mirror, as every opportunity to buy a dip remains the order of the day. Sure, there were more earnings, which were well-received, like better than expected results from Archer Daniels Midland (ADM), while YUM Brands (YUM) results disappointed, but were quickly shrugged off. Even a significant lawsuit by the government on McGraw Hill (MHP) for S&P's ratings malfeasance during the financial crisis didn't deter bulls or the financial (XLF) sector very much. The overall rally was still U.S.-centric, with Europe (IEV) and Emerging Markets (EEM) lagging.

Dell (DELL) took the company private with financing by Michael Dell and some investment from Microsoft (MSFT). This may mean some new joint venture product development, one would think.

The market is driven by