ETF Wrap-Up: The Low Volume Says This Is A Professional’s Market

Like for Old Lodge Skins (Chief Dan George) that’s sort of the way technical analysis works or doesn’t sometimes. We moved to the sidelines for the most part today. Was that smart? It’s too soon to say but we didn’t get the high that’s for sure.

One has to bow to the coordinated efforts to boost banks by Goldman Sachs among others, a rosier “the bottoms in” forecast from Lowes, the fact that we were a little oversold and, of course, the always conflicted organizations like the National Homebuilders (housing in a “slump”) and National Association of Realtors (prices are “stable”).

The Street has a lot of IPOs (some small followed by an AIG subsidiary attempt) and secondary offerings to sell you and they need to prop things up to get it done. Goldman Sachs putting out buy recommendations on BAC when there are secondary issues within the industry is transparent since they know what will lift one will lift all.

Da Boyz are playing with risk-free money from government injections and they know how to get things going. It’s hard to play against the house especially with volume still light.

Actually, volume was late summertime light today while breadth was as positive as one might expect.

So, why did we exit markets today? As I told subscribers when the system says to do it, that’s what we do. No questions asked. It has nothing to do with “the sell in May and go away” maxim even though that might work out ultimately.

The low volume tells you this is a professional’s market. Again, the Street has deals to get done and with the help of basically free government money on their trading desks, they can push markets to where they need them to price and unload this stuff. You can’t get in their way or finesse this kind of power. Retail investors have no interest in markets still. Many are still shell-shocked by what they see in their financial statements. It’s understandable.

Further, with yields this low on risk-free money there’s tremendous anxiety to get better returns for investors and performance fees among hedge funds. It’s that simple.

The good news for the Fry Family is that surgery seemed a success and Francie is recuperating here at the house we’ve rented in Baltimore. We’re in a really nice spot here, and even though we’re within the city limits, we noted a fox with a rabbit in its jaws ambling by the backyard yesterday. How strange is that?

We really appreciate all your kind thoughts and emails. It’s very touching and meaningful to us.

Disclaimer: Among other issues the ETF Digest maintains positions in: aside from not much? Well, there’s IEF, TLT, TBT, DBC and UDN.

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