Wednesday Outlook: Markets Continue to Shrug Off Bad News

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Includes: FAS, IEF, IWM, IYR, IYT, MDY, QLD, QQQ, RKH, SMH, SPY, TBT, TLT, VXX, XHB, XLB, XLF, XLI, XLV, XLY
by: David Fry

August 4, 2009



There are crazy headlines every day and you don’t need me to cherry pick them all but I liked the following:

- “Consumer spending rises in June as incomes fall”. Reuters
- “SEC to ban ‘Flash Trades’ that gives brokers edge, Schumer says”. Bloomberg
- “Fed plans to strengthen bank examinations with expert teams, Tarullo say”. Bloomberg
- “Duncan wields Obama’s $100 billion to make US schools more like Chicago”. Bloomberg
- “Financials surge, save rally.” MarketWatch
- “Demand surges for clunker killer.” MarketWatch
- “6 keys to investing for doomsday.” MSN Money
- “Jon and Kate Gosselin have onscreen spat.” Yahoo News

I was educated in Chicago’s public schools and let me take this opportunity to express my sympathies to parents who may have school age children.

Okay, enough fun, let’s turn to markets where, with the exception of pending home sales, the news wasn’t pretty. But bulls have momentum and are focusing on news they like while ignoring or spinning that which they don’t.

Volume remains light no matter how you spin it and breadth was positive overall.








The McClellan Summation Index shows we’re much overbought. Time for a break? Sure, but don’t count on it.








































































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