Thursday Outlook: Commodities, Global Markets

<< Return to page 1 - Market Playing Investors for Fools
















































No, I can’t fathom any fundamental reason for stocks to rise but they are. As a technician that’s all I’m supposed to know. But as a human being and buying stocks recently, I’ve held my nose doing it.

One of the best articles I’ve read in a while was featured at Bloomberg today regarding risk management strategies used by hedge fund Brevan Howard. In our own tiny way we try to achieve the same thing by carrying heavy cash balances while others feel they must be invested always. There’s a time to play and a time to sit. The latter is always hardest it seems, given performance anxiety pressures.

Let’s see what happens.

Disclaimer: Among other issues the ETF Digest maintains positions in SPY, MDY, IWM, QQQQ, XLF, XLI, XLY, GLD, DBB, DBC, USL, EFA, EEM, and FXI.

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

[Wasabinator:]

The G20 seems to be the latest Kool Aid being offered to raise global sentiment. Over their little banquet they're supposed to be coming up with the quintessential global plan to save the world. Yeah, right. Marvel should make a comic about this stuff.

I find it amusing that there is talk of 'returning to global growth' virtually in the same sentence as 'tighter regulation'. It was simply the loosening regulation that prompted a lot of the speculative growth that gave us all the unsustainable bubbles we have now. Growth and regulation to me are competing ideals for the short/medium term considering the scenario we have in the present day.

Apr 02 08:34 AM

[ravindranat...:]

The rally in Indian stocks are just bear market rallies.The time to short indian index is now.Hold your shorts and roll over to May series around 10th April.U will reap hugh profits around 18th May when election results aer out and comic actors come into play!

Apr 02 09:14 AM

[doubleguns:]

More of the same. A very sharp saw doing a very good job.

Apr 02 09:17 AM

[ArtfulDodger:]

You make some conclusions that I agree with.

But so many charts, Mr. Fry! I've never been smart enough to understand them.

Apr 02 09:17 AM

[User 378502:]

Too many charts, too less persuasive and too few conclusions.

Apr 02 09:27 AM

[Fabien Hug:]

Mr. Fry, I like your work. Clear and concise, a good overview.

Apr 02 10:42 AM

[Hot Richard:]

Fools? I like to consider it a VERY efficient wealth transfer engine.

Apr 02 10:43 AM

[Harry Tuttle:]

Most "investors" actually manage other people's money. Thus, they do not perceive risk and reward the same way the rest of us do.

For instance, if you manage a mutual fund it is much WORSE to "miss the rally" than to lose money when the market goes down. Why? because your boss measures your performance against the index and/or the competition.

Many were underweight in March and are now chasing performance.

Apr 02 11:08 AM

[AndrewBaker:]

I'm with you, David. There are no fundamental reasons for the rise, but it's happening. Base metals have been rising, but they don't stick at it; and gold and oil are doing something similar. You've identified s big problem here: the stops. Too close and you're whipsawed out and/or trade too much. Too far away and you can get hit hard, and often as well. I've bitten down hard and gone with longs recently although my gut is for a sell-off sometime (as we're not through this bear yet), and trading leveraged ETF, which I do, I can't leave the screen for long without worrying.

Apr 02 11:22 AM

[Alex Filonov:]

Who cares about fundamental reasons in technical market? All major indices are running above 13 days moving average, that's all I want to know. Of course, Dow 8000 remains very serious level, let's see if it gets broken. If not, Dow is probably settling in 7000-8000 range.

Apr 02 11:32 AM

[knoc:]

"Sun spots, or a lack of them, is a bigger cause of climate change than man-made activity..."

Actually, no. But it is comforting to attribute climate change to something we have no control over.

Apr 02 11:55 AM

[Seeking Advice:]

Dave, I always appreciate your charts and accompanying analysis and agree that this rally does not seem sustainable given a lack of fundamental economic improvements, but if I have to read one more of your "The One" quips, I'm gonna puke. Repect your technical analysis but too much of the snarky political comentary makes me start to doubt the unbiased analysis that I'm counting on.

Apr 02 01:59 PM

[Quant Girl:]

Dave: Awesome Nat Gas chart, be prepared for a long flat line, that dog isn't going anywhere. Also, love the EWZ chart, that dog is due for another leg down. But Dave, add GSG into your mix, a lot of people jumped in today, we'll see where it gets them. The sun isn't active because it can't believe our "leaders" say they saved the world today. If drunk spending could save anyone, some of my friends will live forever. Thanks for your insight.

Apr 02 10:05 PM

[Patient player:]

Excellent analysis. I like the brevity, factual study, chart based conclusions. But the last quote, "There’s a time to play and a time to sit" is probably what will keep you sane ...and safe.

Apr 03 03:03 AM

[pacman1947:]

David,
The sentiments expressed by the 19 commentors above are all over the map. So is the market and the prognostications for its next direction seeing your charts. I too am impressed by the data displayed in this article and can glean no clear view of the meaning. Fundamentals, sentiment, and market trading characteristics seem to be erratic and discordant.

I chose to get out completely a few days ago and missed two glorious days of euphoria. I slept just fine, having gained 28% on the reflex rally through last Thursday and locking in my gains.

Now, just 70% to go!

Apr 03 07:42 AM

[376602:]

DBA - The Farmers Almanac has a fine record and uses the solar cycles in its forecasts. Modern economists are hardly as accurate as the FA. The data is pointing toward cooling and a possible abrupt end to this interglacial.

Apr 03 10:07 AM

[raytayzmd:]

...first you demonstrate you don't know squat about American economic history:

seekingalpha.com/artic...

...and now you demonstrate you know just as little about sunspots and climate...although there is some evidence for some correlation between sunspot activity and climate, NO ONE has determined the nature of that correlation...however, there IS general AGREEMENT that they have FAR LESS impact on the earth's climate than human actions, such as burning fossil fuels or clear-cutting forests, do...

Apr 03 10:55 AM

[Alex Biggs:]

www.harpercollins.com/...

www.history.upenn.edu/...

Please feel free to provide the readers of this column your authority and credentials that substantiate your comments.


On Apr 03 10:55 AM raytayzmd wrote:

> ...first you demonstrate you don't know squat about American economic
> history:
>
> seekingalpha.com/artic...
>
>
> ...and now you demonstrate you know just as little about sunspots
> and climate...although there is some evidence for some correlation
> between sunspot activity and climate, NO ONE has determined the nature
> of that correlation...however, there IS general AGREEMENT that they
> have FAR LESS impact on the earth's climate than human actions, such
> as burning fossil fuels or clear-cutting forests, do...

Apr 03 11:36 AM

[Katzlou:]

RaytayzMD?

No bio.

Comment stream results look like this:

raytayzmd's
Comments Stream Stats
238 comments
Rating: 9 (335 thumbs up- 326 thumbs down)

Impressive. Let me add to that thumbs down tally.

You're on the wrong website. Move along.




On Apr 03 10:55 AM raytayzmd wrote:

> ...first you demonstrate you don't know squat about American economic
> history:
>
> seekingalpha.com/artic...
>
>
> ...and now you demonstrate you know just as little about sunspots
> and climate...although there is some evidence for some correlation
> between sunspot activity and climate, NO ONE has determined the nature
> of that correlation...however, there IS general AGREEMENT that they
> have FAR LESS impact on the earth's climate than human actions, such
> as burning fossil fuels or clear-cutting forests, do...

Apr 03 12:17 PM

[raytayzmd:]

...why are you linking to Mr. MacDougall?...to support some point?...hell, read MacDougall's book "Throes of Democracy" -- something I seriously doubt Mr. Fry did!...that book was the basis of my rebuttal to Fry's less than cogent analysis in a the previous article:

"uhhh, wrong:

"During the Panic of 1837 most banks and businesses collapsed. So too did employment and the then burgeoning stock market. Folks were wiped out but President Andrew Jackson did absolutely nothing."

...well, yes, banks, businesses, employment, and the stock market collapsed ...BUT -- big "BUT" -- Jackson's actions CAUSED the panic of 1837 by blocking rechartering of the Second Bank of the United States...this led to a proliferation of state and local banks and a coincident expansion of uncontrolled credit and speculation...the speculation was funded by paper notes issued by the banks but NOT backed by anything substantial (e.g. gold or silver) -- something kin to derivatives...to rein in the speculation Jackson had the "brilliant" idea to require gold and silver be used to pay for purchases of government land...that, in turn, led to a huge demand for gold and silver...but when people tried to trade in their notes, the banks didn't have the gold and silver necessary to redeem them...the banks collapsed and the panic was on...but it wasn't anything Jackson needed to worry about he didn't do anything because he LEFT OFFICE in 1837 -- hmmm, who does that remind me of?...and, similar to today, trying to cope with the mess he left the country in caused the federal debt to skyrocket...and saying "none were resolved by government intervention" is rather absurd since every panic has been dealt with by government intervention -- no one knows what would have happened had there been no intervention...and most people are uncomfortable with the govenment standing around twiddling its fingers while the economy goes down the toilet."

...all except those last few phrases is practically straight out of MacDougall -- I can look up the page numbers for you if you'd like...and my positive/negative ratio is merely a reflection of my inherent tendency to mock people that have no idea what they're talking about -- tends to upset them and their supporters, don't you know?






On Apr 03 11:36 AM Alex Biggs wrote:

> www.harpercollins.com/...
>
>
> www.history.upenn.edu/...
>
> Please feel free to provide the readers of this column your authority
> and credentials that substantiate your comments.

Apr 04 08:38 AM