Friday Outlook: Commodities, Global Markets

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It’s the run of the bulls but the herd is smaller. Does that matter? Yes and no since rallies often start with just a few participants. Clearly, TPTB are making a concerted effort this week to get things pumped up. Somebody put a gag on Obama for a few days, Bernanke did his part, the FASB is being manipulated to hide the trash under the carpet, “always late but never wanting to hurt a pal” Standard & Poo did its job for GE, and with markets still long-term oversold, a rally was always a strong likelihood.

It was generally the case that before the mortgage derivative explosion and mark to market issues, that banks and other financial institutions carried many investments at cost. But, those assets actually had real value and weren’t toxic waste. To force the FASB to alter reality is the ultimate manipulative strong arm tactic. It may buy some time, but the toxic waste dump is still there poisoning the asset pool.

We head into Friday the 13th again without too much news other than what TPTB may conjure up for us.

By the way, with podcast pal Greg Newton on the road I’ll be doing an interview tomorrow with Teresa Lo of InVivo Analytics tomorrow. It should be interesting.

Let’s see how Da Boyz can finish the week.

Have a great weekend!

Disclaimer: Among other issues the ETF Digest maintains positions in IEF, TLT, GLD, FXE and DBB.

The charts and comments are only the author’s view of market activity and aren’t recommendations to buy or sell any security. Market sectors and related ETFs are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period. Chart annotations aren’t predictive of any future market action rather they only demonstrate the author’s opinion as to a range of possibilities going forward.

Comments

[boisterousbob:]

Brilliant! Just plain Brilliant! Thankyou David.

Mar 13 08:41 AM

[cynewulf:]

get the feeling you do not trust Larry Kudlow or CNBC.

Mar 13 10:02 AM

[AndrewBaker:]

Well, I must be missing something: the fundamentals are bad, the charts are not encouraging, yet we've had a rally based on ... absolutely nothing, except a suggestion in a "leaked" letter that a bank might have made some money in Jan and Feb, and a request from a banker to stop being negative towards the financial sector. Obama's not spoken much this week, which seems to have had a positive effect. Well, although I won't be banking on my fortune coming from this rally, it has hurt my shorts some, so intraday longs definitely called for right now.

Mar 13 10:11 AM

[David Fry:]

Larry Kudlow is someone I've known since the 1970s when he was an economist at Paine-Webber. I found his writings informative and helpful then.

Now with CNBC the job is not to tell it like it is but pump, pump, pump.........or, pimp, pimp, pimp. I don't watch the network ever so don't know what he's pimping and pumping nowadays.

You're seeing a lot of "happy talk" this week. (Why the folks at Standard & Poo aren't in the slammer with Madoff is beyond me.)

I enjoyed Jon Stewart's ripping of Crammer last night and thought he had things right.

By the way, the greatest smokescreen being sold as an elixir is this "uptick rule" BS. Reinstating it will have absolutely no effect on market direction. There have been days when financials have fallen hard and watching the intraday tape you can see plenty of upticks on the most bearish 1 minute chart. So, don't let boy wonder fool you.

As to "brilliance".........w... Boisterous Bob, how much do I owe you again?

Mar 13 10:31 AM

[Yankee Runn...:]

Changing the rules on Marked to Market? What shameless fraud. When the 30 to 1 air money was pouring down on everyones heads and Marked to Market helped pump the whole Ponzi scheme up, up up, no one was complaining about Marked to Market. Of course not, that is what it is designed to do, pimp and pump the bull market version of reality of air money. When things turn south (just take a look around!) and no one can quite seem to get their hands on the disappearing air money, the Ponzi scheme gets a little shaky. So just move the goal posts, rewrite the marked to market rules so all of that bad air money can dissappear or at least be hidden under a rock somewhere. And who knows, if the Zombie banks like Citi and Bank of America get nationalized with taxpayer money, then the taxpayer will have to pay top retail dollar for crap. Think that would make the Wall Street banking crowd smirk. Quoting David Fry, innocent people are losing their jobs while the fraudsters are still on their yachts ( except for Madoff, the sacrificial lamb!)

Mar 13 12:00 PM

[Yankee Runn...:]

Dave,

By the way, Kudlow the Clown is now pimping changing the mark to market rule. Who could have guessed...

Mar 13 12:36 PM

[dc1:]

Hi Dave,

I like your charts amd most of your comments; but really, step back and take a deep breath.
We all know now that you don't approve of the Obama administration, but do you really think he is doing a worst job than Bush did.
This has got to be the most negative post you have made so far. Please try not to outdo yourself in the future.

Mar 13 12:39 PM

[bthomas:]

The bankers must be reined in. We should start with rational regulation where responsible adults can trust the veracity of what comprises AAA rated securities. Those irresponsible parties must be held accountable. Conflict of interest is pervasive on all sides, from government to regulator to business . This seems to escape everyone's attention. It's all public money now folks, the public trust must be upheld. We are ten years hence from repealing Glass Steagall. Everything is in shambles now because greed overrode every other aspect of life. The Fed has too much power. congress should work to rein this in. Glass Steagall, or whatever replaces it, must be enacted to require people to do what greedy people cannot do for themselves: -the right thing. Split them up. Preserve the public trust.

Mar 13 03:08 PM

[AndrewBaker:]

Why ... ? How ... ? Sensible people point out that the market's being pumped with hot air. No-one can surely believe that the uptick rule will prevent bad stocks going down, can they? Yet we're having a rally where real people are putting real money into stocks that will really fall in price next week. I'm taking a happy pill and going away for the weekend. This is all too much for me.

Mar 13 03:12 PM

[bobbobwhite:]

Giving a nod to the movie Trading Places, I do not think the market turns on anything more sophisticated and arcane than a collective and manipulated, "wait, wait, wait...now buy all you can" when it gets to an agreed upon low. Then, the reverse happens when it gets high enough to make obscene profits. Then.... well, you get it now.

All your charts are smokescreens. See above paragraph for what really happens.

Mar 13 03:13 PM

[investor88:]

With benefit of hindsight, the recent rallying call from Doug Kass, Dr Marc Faber, David Fuller was spot on. Those who latch on to them made good money.

Now it makes sense to look at Dow testing 800 although it pays to have stop loss/sell stop along the way. It's all about market sentiment.

Mar 13 08:01 PM

[investor88:]

Correction: I mean Dow testing 8000 [not 800 typo error].

Mar 13 08:02 PM

[Quant Girl:]

Even though the charts speak for themselves, your insight is appreciated. I'm like you, turned off CNBC a long time ago. Think of the bloated market cap and how GE took advantage........did I mention I've been short GE for over a year?

Mar 13 09:45 PM

[mrktcap:]

I really hope this market rally holds, who really wants another major market landslide when buying into this rally. It was told in November, we hit bottom. Buy Buy Buy. and look what happened. I personally don't want to give up my summer vacation for false profits like I did for Christmas.
Be a deer in this market. Stay clear of the bears and bulls that false pump the market for their greedy gain. Don't forget China might be pulling back its buying of gov't bonds, so don't tell me there isn't political tension to make the market rally.

Mar 15 09:17 AM