Friday Outlook: Commodities, Global Markets 31 comments
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<< Return to page 1 - Another Bubble Attempt in the Making
The “forward look” used to be the tag line for Chrysler years ago and look where that got them. Nevertheless, bulls have the tape and are seeing happy days ahead you’d think.
The 2 PM Buy Program Express can’t be predicted too often or be on time. But, when things are quiet and bears seem spent, it's easy business for Da Boyz to prop things higher. Sometimes they can take it the other way but that’s not why the government gave them all this money.
GOOG reported earnings and they sold the stock a little after hours along with other tech names. They don’t call it the amateur hour for nothing.
I’m off to a doctor’s appointment so I don’t have time to say anything cool as we wind up.
Have a great weekend!
Disclaimer: Among other issues the ETF Digest maintains positions in: SPY, RSP, MDY, IWM, QQQQ, XLB, XLF, XLI, XLY, IYR, DBC, DBA, DBB, USL, MOO, EFA, EEM, EWH, EWM, EWA, EWZ, IFN 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.
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This article has 31 comments:
Anyway,you're right about the daily charts...not much help..
Thank for your post,as always..
But total volumes during this rally are on the low side, this clearly shows lack of conviction.
GE will set tone for the day.
This is the first time in my memory I didn't see a GLD chart. Conspiracy theorists will claim you have moved over to the dark side. My "guess" is that you feel it is irrelevant or golds moves are so unexplainable its not even worth trying? Please explain so I don't have to "guess".
My take on the market for what it's worth is that the administration is gambling that they can "talk" the markets/banking system back to health and they very well know they are stretching the truth and downright lying at times. They have put all their cards on the table for this final bluff. If it works they will be hero's. If it fails, some of the doomsday scenarios become a possibility and the general public will turn on them faster than the speed of light and possibly not return until a new administration takes over.
Have a great weekend and thanks for all your insight/analysis.
However, there is a limit to how often and how much you can keep pumping up an economy with debt and monetary excess, and I suspect that after two back-to-back bubbles, the third will prove less durable and less sustainable, assuming it takes off in the first place, which is doubtful.
The amount of distortion suffered by the underlying real economy keeps growing. As the Fed or the government continue to pick winners and losers, allocate capital, and allocate losses and rewards, all in arbitrary fashion; the system gets closer to a centrally planned economy, and farther from a market driven economy. History has shown that centrally planned economies are unsuccessful, so another distortive bubble is likely to result in a weaker economy.
I think I´ll be buying TBT next week!!!
Thanks for the charts.
Bubbles are human nature. So far the economicists haven't found a way to prevent them. Positive feedback loops are tough.
Just don't be a bagholder this time (again).
Stocks did not perform well during the stagflation era of the 1970's. I'm not optimistic that they will be a good hedge if we get into a stagflation period. And I think there is a good chance of that. Like 60% at least.
The article presenting Stiglitz's views was interesting. Here we have a Keynesian criticizing the current administration's economic policies - what does he think, that we should be MORE focused on fiscal policy?
Also his concern about getting advisers from top wall street firms is amusing. Government needs to get experienced, talented individuals from some place. Perhaps he thinks academics (like Stiglitz himself) should be running things at the Fed and Treasury. Yeah, that's it I bet. He wanted a job like he had with Clinton and now he's unhappy.
The S&P 500 earnings forecast for full year 2009 is around $13 and change. And this includes the creative bank earnings.
So, do we really feel the market is "fairly valued" at a P/E of 60?
On Apr 17 10:29 AM asaf123 wrote:
> Some fundamentals (remember those?)
>
> The S&P 500 earnings forecast for full year 2009 is around $13
> and change. And this includes the creative bank earnings.
>
> So, do we really feel the market is "fairly valued" at a P/E of 60?
>
>
<<said with dipping sarcasm>>
On Apr 17 06:36 AM User 353732 wrote:
> The serial bubble creators are STILL in control of public policy
> formulation and execution at the Executive Branch and on Wall St.
> Bubble making is what they know how to do and what they like to do.
> They have profited mightily from it. The strategy has brought great
> personal riches and towering public power. For the bubble makers,
> it works. The fact that the burst bubbles bring misery and fear to
> the common person is really of no consequence to the entrenched elites.
> The bursting of one bubble merely provides the basis foer creating
> the next one. For the bubble elite it really is a wonderful life;
> Why change?
there are times though the risk/reward enters the realm of moral hazard. where that place exists depends on each bubbles formation and characteristics. this last bubble, over leveraged credit, severely blew up the economy, the global economy in fact.
the current market run up is a bear market rally i like to equate to longing for the nostalgia and wishful thinking. with all the money floating around, perhaps a new bubble with form now. i don't think so. the governments around the globe are engaged in "player of moral hazard of last resort" to keep the economy on it's feet. though credit has frozen quite a bit, it will though when it looks like the economy is back on track.
capitalism and moral hazard don't always go hand in hand. moral hazard is usually created when greed enters and takes control of peoples minds. that's usually when late comers to the party at the orange press start squeezing just peels because all the fruit is already gone. that's why i believe making steady incremental gains over time adds up to lasting wealth, not hyper-capitalism. note: this does not mean buy and hold. you still need to be wise and gentle on the throttle.
On Apr 17 10:59 AM Alex Filonov wrote:
> If it's like 2003 and we have 4 years of bull market ahead, I wouldn't
> complain. May be a bubble for you, but a great opportunity to make
> money for me.
Looks like the strategy has been to give the shorts and the financial and RE short funds such a shellacking that we dare not.
The crooked cartel's power is freaking awesome. But it's still all in the process of unraveling, and they're showing increasing desperation. The result is a market that behaves so irrationally and without fundamental justification that confidence will only grow shakier until it collapses.
ftalphaville.ft.com/bl.../
And now, let´s add this:
stockcharts.com/h-sc/u...
or:
stockcharts.com/h-sc/ui?s=$USB&p=D&yr=3...
David, IMHO, you´re 100% right. "If it looks and acts like a bubble, then...."
China,that's who.
All that bad paper being presented as worth something will not be picked up by anyone except of course Obama and co. Aptly named a co. since we are headed more toward facism than socialism. Of course a few poor sops will buy into it only to be the new bag holders. I just don't see that many who will be fooled into thinking a dressed up turd is more than a turd. Add to that a massive injection of new capital and we can't avoid inflation. Will it stop at that or begin to stagflate is the question I wonder about now.
Bear market rally, resistance levels, a bubble...they all are one in the same this time. This past six months have seen manipulation in the markets at unprecedented levels. All geared at transferring the capital of individuals into the hands of the bankers and the ones who regulate. And it is so openly brazen this time. Usually we have to wait months for the shenanigans to come to light. Now we are told that companies unable to survive are too big to let fail. It is my opinion these companies are too big to not let fail. I think I liked it better when the fraud was hidden and tried to be kept under wraps. At least that way we all could judge better which way the markets would run or if not, have time to cut losses to minimum.
May we come out on top.