Tuesday Outlook: Commodities, Global Markets

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Was that enough charts? Holy blue lines Batman! Well, I had to make up for last week’s slimmer postings.

Look, I don’t care what anyone says, volume matters. This rally is impressive certainly but so far it’s just Da Boyz having some fun and making money with TARP funds. Tomorrow we get more data and folks get back to work in earnest.

No, I don’t like the markets emotionally nor do I like what’s happening to our country. But, in the scheme of things, my role is to press on implementing our systems. Not doing that leaves me and our subscribers adrift.

Goldman Sachs needs to get a deal done. The syndicate put together knows they need to circle the wagons and prop prices to the level necessary to satisfy GS, period. After 35 years of doing this I can say I’ve seen this movie before.

Earnings matter and we’re getting into the thick of them. Bulls will spin bad numbers as “old news” and pump stocks. Bears seemingly are sold-out and in hibernation.

And, thanks everyone for the kind emails wondering if I was ill. Nope, I just was recuperating from a minor procedure where a sedative made me a little fuzzy. So you probably think I’m a drunk or something. Well, no… but, it is 5 PM so….

Let’s see what happens.

Disclaimer: Among other issues the ETF Digest maintains positions in SPY, MDY, IWM, QQQQ, FDN, RSP, XLB, XLF, XLI, XLY, IYR, TIP, LQD, FXA, DBV, DBC, DBA, DBB, DBC, USL, XLE, MOO, EFA, EEM, EWA, EWC, ILF, IFN, EWH, EWM, EWJ, EWZ, 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

[doubleguns]

As always thank-you Dave for the fine charts and I like the story about the sugar. It made me feel better and worse since I have a lot of UNG. I was wondering what I would do if UNG went to 2 cents!!!! Ughhhhhhhhhhhhhhh. That would be a nightmare!!!

Seems perverse waiting on hurricane season.

2009 Apr 14 06:21 AM

[dcb]

thanks for posting what I see as manipulation also. When I post the idea I get roundly panned. I have very little experience, but have spent enough days sitting i front of a screen at this time to know something fishy when I see it also. Please do no forget to add that now having drove the market down by naked shorting they have decided to pressure the sec to clamp down on it.

I wish the regular press started to cover the manipulation in the market. with the public so unaware it is easy to play games.

2009 Apr 14 08:10 AM

[schlumpf]

thanks David,

Retail Sales Take Unexpected Drop; Producer Prices Fall
so buy buy buy,

LOL

2009 Apr 14 08:47 AM

[Shortstick]

Thanks as always Dave. Like the other poster I have UNG and am tempted to buy more on weakness. Your cautionary tale does make one pause though! Just think at these prices supply will dry up, not to mention enviro aspects and conversions from Coal and other. Oh well. :-)

2009 Apr 14 09:18 AM

[PDL27]

My partner and I were considering a paired trade of Long UNG and Short oil figuring the two should move directionally together and UNG is way below historical norms relative to oil. But then we just looked at UNG's chart and couldn't justify trying to catch the falling knife.

Good luck, doubleguns.


On Apr 14 06:21 AM doubleguns wrote:

> As always thank-you Dave for the fine charts and I like the story
> about the sugar. It made me feel better and worse since I have a
> lot of UNG. I was wondering what I would do if UNG went to 2 cents!!!!
> Ughhhhhhhhhhhhhhh. That would be a nightmare!!!
>
> Seems perverse waiting on hurricane season.

2009 Apr 14 10:23 AM

[7xy]

Forgive me for the dumb question, I'm new at this, but why have positions on SPY, MDY, IWM ? Wouldn't just buying VTI accomplish the same w/ fewer trading costs?

2009 Apr 14 11:35 AM

[David Fry]

7xy........

Sure, but I write a newsletter for an audience interested in all the ETFs.

From a large menu, we cobble together a few portfolios using fewer ETFs including VTI.

2009 Apr 14 11:48 AM

[Clamdigger]

Dave, thanks for your work. What about Tech? XLK, etc. ...or maybe I missed it sipping my cheap chardonnay?

2009 Apr 14 06:51 PM

[RiskReturnOptimizer]

Surprised to see the comment on being long IYR ... I know charts say it's got some support at $27 or so, so perhaps tonights comments will show that you are already out of the trade ... but fundamental story seems to be deteriorating.

Is there a pairs trade that can "tease out" retail (malls) vs. office space vs. apartments, perhaps long apartments, and short office and malls?

If unemploment rate hits 10%+ and stays there, office and malls both suffer as people have no work to go to and no money to shop(?) Hopefully, they will still pay their rents (rental market may even benefit as former homeowners become renters after being foreclosed?) Any good ETF plays to get this pairs trade?

2009 Apr 14 08:03 PM

[goalposts]

OK, I'm guessing colonoscopy. Tell your gastro guy to lay off the demerol and get you a licensed anesthesiologist...and don't lift anything heavy for a while.

Seems somehow symbolic for someone to have a colonoscopy during a bear market...

2009 Apr 14 09:28 PM

[Freya]

first chart, first page, Saw formation last December which ultimately collapsed in January.

That formation had an upside move of what 40% or so before it collapsed, I should be so lucky.

2009 Apr 14 09:36 AM