There's nothing worse than range-bound markets. They can suck you in long or short only to spit you back out with a series of small, if you're lucky, losses. But, perhaps we're moving back to the primary bear trend meaning the recent rally was an awakening [like the movie] that didn't last.

PPI inflation data for July came in at 1.2% [annualized at, gulp, 14%] while consensus forecasts by economists [are they ever right?] were for only .3% but, there's another story. Just as investors were overly long commodities and short the dollar last month now they're heavily invested in the opposite manner. Overdone again? Sure, so it didn't take much to stampede the herd in the opposite direction once again.

Breadth is as negative as one would expect given the headline index declines. However, volume isn't high but is little comfort to those eying their two day performance results.











































































































Ongoing worries in financials coupled with a gonzo inflation number had investors scrambling to reverse course today and so far this week. You can tell I don't like trading ranges. If that's what we're in then high cash balances are appropriate. On the other hand, if we're about to start another leg lower beneath prior lows then so be it since I like trends.

The dollar rally and short commodity trade maybe went too far too fast. Sometimes traders will close a good position just to cover losses from another sector. That may seem odd but who said the Street was logical?

Tomorrow we get energy inventories and the drama within financials continues to build.

Let's see what happens.

Disclaimer: Among other issues the ETF Digest maintains long or short positions in: IWM, UWM, XLY, XLV, RXL, XLP, UGE, IEF, UUP, DBC, DEE, GLD, DZZ, EFA, EFU, EEM, EEV and FXI