I’ve been posting this image quite a bit recently since the past few Monday’s have been busts. There wasn’t much to cheer about so using a swine flu outbreak panic was a good reason to sell. It seems there are plenty of reasons to sell: light volume, high PEs, the BS (or, what you don’t know can’t hurt you) from Fed bank “stress tests”, the big run-up we’ve had in prices, auto bankruptcies and so forth.

As you can see volume remains comparatively weak while breadth was negative today.










































































































We’re paying a big price for past excesses primarily from bubbles caused by easy money policies of the past combined with the demise of Glass-Steagall in 1999. So the lying and cover-ups just continue apace since, given the election cycle, politicians would just as soon inflate as admit mistakes and make the hard choices. It’s all quite shameful but that’s what we have and it might be the undoing of our democracy.

Volume remains low and this just means markets are in the hands of professionals from trading desks to hedge funds. There isn’t a lot of flow from individuals into markets and brokers phones are generally quiet in that regard.

Aside from swine flu we didn’t get much news today but tomorrow is GS Store Sales, Redbook Case-Shiller HPI and Consumer Confidence data. And, did you know the Fed is meeting again with an announcement on Wednesday? The Fed focus groups are meeting at the same time to test the wording that the grand Pooh-Bahs of TV and Wall Street will be dissecting.

So, as usual—let’s see what happens.

Disclaimer: Among other issues the ETF Digest maintains positions in: SPY, MDY, IWM, QQQQ, XLF, XLI, XLY, IYR, XLB, DBC, USL, DBB, DBA, MOO, EFA, EEM, IEV, EWJ, EWZ, IFN and FXI.