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ETF Tracker Newsletter For September 10, 2021

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PUKING INTO THE WEEKEND

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

Another opening bounce in the markets turned out to be fake with the major indexes hitting the skids and not only diving into the weekend but also closing at the lows of the session with breadth worsening.

This marks the 5th day in a row of losses although, for this Holiday shortened week, the S&P 500 dipped only 1.67%, which is modest given the strong advances we have seen. Nevertheless, it’s the index’s worst week since about the middle of June.


Added ZeroHedge:

Every dip that was bought this week was met with more selling… that is NOT what the doctor ordered!! Everything looked great overnight but the cash equity open saw the selling begin and barely stop and the close was really ugly…

Apple didn’t help matters with the stock sliding some 3% due to a ruling that the tech giant no longer can force developers to use in app purchasing, which means, simply stated, they must give up some of their monopoly position.

What really hurt the markets and took a huge bite out of the Fed’s credibility stating that inflation is transitory, was the August Producer Price Index (PPI), which reflects a more realistic state of inflationary forces. The PPI showed wholesale costs for businesses rising 8.3% per annum, which was the biggest advance since 2010. For the month, the index raced ahead by 0.7%.

Bond yields rose, the US Dollar rallied, and Gold again was pulled below its $1,800 level. There was no place to hide with “SmallCaps” and “Value” all showing red numbers.

The question now remains whether there is more downside to come, and if so, will it be enough to trigger our trailing sell stops and subsequently our Trend Tracking Indexes (TTIs)?

No one has that answer, and we will have to wait and see how things play out, but this chart by Bloomberg indicates the ever-widening alligator gap, which eventually will snap shut.

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