Markets move higher given belief the ECB will cut interest rates Thursday. This belief trumps a host of bad economic data so far this week. Tuesday bulls ignored a substantial drop in manufacturing activity as manufacturing reports showed substantial declines. The PMI Mfg Index declined to 52.8 vs prior 54.1 and the ISM Mfg Index imploded to only 48.6 vs prior 50.1. Construction Spending did improve modestly to 1% vs prior 0.6%. But at the same time retail store sales slumped 10% year over year on the wacky Black Friday holiday shopping.

One thing to remember as a trend-follower to note is the old maxim, “the news follows the trend”. This would normally mean when current news isn’t positive but stocks are still rising, this should mean trend supportive and better news should follow to support rising prices. Some would assert in this environment the only good news markets need is from central bank policies. The ECB would do the trick but what about the U.S. Fed, seemingly determined to raise interest rates? That seems to be the rub doesn’t it?

Other problems are front and center as Puerto Rico makes a last minute payment to creditors averting a default but it’s only a temporary solution. Next up is what’s taking place in South America’s most important economy—Brazil. It will release data tomorrow showing the economy there is entering arecession depression.  So yeah, there’s trouble we can’t ignore, or can we?

Stocks continued to rally into the close of trading on this Turnaround Tuesday. Again, the rally was attributed to hoped-for stimulus from the ECB Thursday.

Market sectors moving higher included: S&P 500 (SPY), Dow (DIA), Tech (QQQ), Healthcare (XLV), Financials (XLF), REITs (IYR), Energy (XLE), Consumer Discretionary (XLY), Utilities (XLU), Consumer Staples (XLP), Homebuilders (ITB), Transports (IYT), Small Caps (IWM), Europe (VGK), Emerging Markets (EEM), EAFE (EFA), South Korea (EWY), Taiwan (EWT), Japan (EWJ), Australia (EWA), Euro (FXE), Mexico (EWW), Canada (EWC), Asia ex-Japan (AAXJ), Gold Stocks (GDX), Hong Kong (EWH) and Bonds (TLT) and a scattered array of other country funds.

Market sectors moving lower included: Energy MLPs (AMLP), Russia (RSX), Dollar (UUP), South Africa (EZA) and a small handful of others.

The top ETF daily market movers by percentage change in volume whether rising or falling is available daily.

Volume was modest once again and breadth per the WSJ was positive.

I’ll be going slowly for most of the week since we still have plenty of economic data (not that it seems to matter) and Fed Governor speech making.

The Employment Report should be good headline positive this coming Friday. Stores will be hiring temp workers for the Holidays which could/should skewer results.

Perhaps by Friday, barring any other unexpected news, I’ll be writing Dave’s Daily in this shortened manner.

Let’s see what happens.