Wednesday Outlook: Commodities, Global Markets

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I did get a lot of requests, and to my Danish friends there aren’t any US trading Norway or Finland ETFs yet, but give them time, they’ll have them out sooner or later. Again, I’ll try to cover what interests readers.

Now, about that Peter Sellers/Bernanke thing, I offer no apologies. I just couldn’t resist. It’s no coincidence like we’ve been posting that Fed officials are speaking every day this week. They wanna pump you up, a la Hanz and Franz. Plus they’re taking some bows for their stewardship of conditions. Are you applauding? Do we really want to create another bubble? It seems the easy way out.

Volume remains light and markets are overbought. There’s some serious economic news coming like employment data. But bulls are hardened to bad news and will spin things to suit their agenda.

Let’s see what happens.

Disclaimer: Among other issues the ETF Digest maintains positions in SPY, MDY, IWM, VTI, RSP, QQQQ, XLI, XLB, XLY, IYR, IEF, TLT, TBT, DBV, DBC, USL, XLE, DBA, MOO, DBB, XME, EFA, EEM, IEV, ILF, EWW, EWZ, EWC, EWJ 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. More detailed information, including actionable alerts, are available to subscribers at www.etfdigest.com.

Comments

[TonyNasir:]

Real foolish article from a seemingly bear. I am not sure what the author is trying to say here.

May 06 04:28 AM

[TonyNasir:]

BTW, I am a long-term bear but think this is not a good time to be bearish...esp. when the market has positively weathered the earning season and the economic data kept on improving due to the enormous stimulus! The best time to short would be just before the start of the next earning season.

May 06 04:33 AM

[Daniel Herkes:]

Over bought and due to be sold. No foolishness is this excellent summary of the prior days trading. I'm not a permabear, and Mr. Fry is not either; these equities are just overvalue, and we are due for an adjustment. None of the stimulus money has made it to the economy. The earnings were dismal, in my opinion. The banks are profitable, but only due to the TARP money. And the Fed. is exceeding their brief as a bank by joining the cheer leading team. This is a bear market rally.

May 06 06:13 AM

[Seeking Advice:]

So, Dave, do we just give up on fundamentals? Can 'we' just keep talking up the economy and the markets go up... indefinitely? Can we remain on the top side of the overbough/oversold chart indefinitely and not have any significant correction? I would love to believe the the 'all clear' bell has rung but I fail to see what's changed. Unemployment is high and likely to continue higher as there's no catalyst for that to change. Wages aren't going to increase in this environment. Home prices are declining and foreclosures remain severly elevated.

Personal debt also remains high and people still have to save more to make up for their lower home values and smaller 401(k)'s, neither of which are likely to leap up to their former trejectory.

I fail to see how we can just jump back to where things were. The way things were was/is part of the problem, it was demonstrated to be an unsustainable model. I admit being confused but still holding stocks, albeit at a little lower percentage.

May 06 07:38 AM

[doubleguns:]

You list many of the reasons to believe that this is a bear market. Of course fools could buy these stocks until the P/E is 250 to 500 but that would be well...............foo...


On May 06 07:38 AM Seeking Advice wrote:

> So, Dave, do we just give up on fundamentals? Can 'we' just keep
> talking up the economy and the markets go up... indefinitely? Can
> we remain on the top side of the overbough/oversold chart indefinitely
> and not have any significant correction? I would love to believe
> the the 'all clear' bell has rung but I fail to see what's changed.
> Unemployment is high and likely to continue higher as there's no
> catalyst for that to change. Wages aren't going to increase in this
> environment. Home prices are declining and foreclosures remain severly
> elevated.
>
> Personal debt also remains high and people still have to save more
> to make up for their lower home values and smaller 401(k)'s, neither
> of which are likely to leap up to their former trejectory.
>
> I fail to see how we can just jump back to where things were. The
> way things were was/is part of the problem, it was demonstrated to
> be an unsustainable model. I admit being confused but still holding
> stocks, albeit at a little lower percentage.

May 06 07:52 AM

[doubleguns:]

You list many of the reasons to believe that this is a bear market. Of course fools could buy these stocks until the P/E is 250 to 500 but that would be well...............foo...


On May 06 07:38 AM Seeking Advice wrote:

> So, Dave, do we just give up on fundamentals? Can 'we' just keep
> talking up the economy and the markets go up... indefinitely? Can
> we remain on the top side of the overbough/oversold chart indefinitely
> and not have any significant correction? I would love to believe
> the the 'all clear' bell has rung but I fail to see what's changed.
> Unemployment is high and likely to continue higher as there's no
> catalyst for that to change. Wages aren't going to increase in this
> environment. Home prices are declining and foreclosures remain severly
> elevated.
>
> Personal debt also remains high and people still have to save more
> to make up for their lower home values and smaller 401(k)'s, neither
> of which are likely to leap up to their former trejectory.
>
> I fail to see how we can just jump back to where things were. The
> way things were was/is part of the problem, it was demonstrated to
> be an unsustainable model. I admit being confused but still holding
> stocks, albeit at a little lower percentage.

May 06 07:52 AM

[doubleguns:]

well........foolish.

May 06 07:53 AM

[dirty_dirty:]

anyone look into how volume in this "rally" compares to past bear rallies? is this low volume trying to say something?

May 06 07:59 AM

[Eric in IL:]

I looked back at Mar 9 articles. I do not find Mr Fry to be very helpful at inflection points. Either we gap higher soon or we head back to 750 on the S&P. I think the sideline money is waiting for some moving averages to turn positive.

May 06 08:50 AM

[AndrewBaker:]

Well done today, Dave. It is clear that people are ignoring the stress tests and buying on cheerleading comment. Those overhead gaps will show the way forward - in the shorter term anyway - as if they, and the NASDAQ/tech in particular are filled, then this rally will continue, but if resistance holds, then watch a big bad bear move downhill fast. Getting into corporate bonds right now could be a useful cautious move, and barbell that with something in emerging markets and natural gas, both of which are indicating they at least are positive. But I'm still watchful for the downleg that is due because this rally is not supported by any real recovery.

May 06 09:32 AM

[elee:]

Why is KOL burning up the track while UNG continues to plummet? Both products sell to the same market----a mix of electricity generation and industrial users.....?????

May 06 09:44 AM

[sacking:]

Some are saying the economy will turn later this year. In anticipation, oil, and commodity based economies (XLE, ILF) are moving higher. I've been a buyer of ILF in the 20's and hope it continues higher.

May 06 11:20 AM

[Yankee Runn...:]

Comments about Helo Ben

Wow, the Fractional Reserve Banker speaks.... What else could he say. After all, he is the official spokesman for the Fractional Reserve Banking system that we have. Let me see, what is that, oh yea, that is the system that allows banks to pump air money at 10 to 30 to one ratios into the financial system. The banks only have to keep 10 % reserves while the rest is air. This fraud has been going on for about 300 years. Deflation is when the masses smell the con and go running for their money and find that there is nothing but air... It is Ben's job to re inflate the con, with spin stories about the recovery that will be here in six months. If he can get the masses to believe this, then the fraudulent system might start working again. Right now, the only money going into the Ponzi Scheme is the air money from the government. Not a good position to be in, the last into a Ponzi Scheme. Lets give Ben a new name, Ponzi Finance Minister. He makes Madoff look like a piker. The Orwellian doublespeak continues, 30 % drop in housing is good, Chrysler goes bankrupt and it is good, 600,000 job losses a week is good news... Joseph Goebbels would have been proud of this disinformation.

May 06 11:42 AM

[Missing_Link:]

The "Being There" reference makes this article full of win.

May 06 11:59 AM

[History Buf...:]

Since we're doing media references here, I'm going to throw in a song. It was by Prince, and it was called "1999"

Let's party like it's 1999 ...

Remember the Nasdaq hitting 5000? Remember the boosters who were saying that earnings didn't matter, P/E didn't matter, book value didn't matter.

Where's the earnings? Where is there anything tangible in this "rally"?

Methinks I smelleth a rat.

May 06 04:12 PM

[twitee:]

Ponsy scheme at best!!!
Free Market right!!????
Market it is not suppose to make any sense or to be efficient when the Mobster FED is in control of everything now. Borrow from Paul to pay Paul or borrow from Peter to pay Peter..wait a minute it was suppose to be borrow from Paul to pay Peter, right?.......

This is nothing but a one big GIANT ENRON waiting to explode like a time bomb before 2012.

May 06 05:07 PM

[bthomas:]

Breadth and volume are key to true rallies. This is not a sustainable rally by any metric except the ruby slipper metric. No this isn't Kansas Dorothy, and we're not going home.


On May 06 07:59 AM dirty_dirty wrote:

> anyone look into how volume in this "rally" compares to past bear
> rallies? is this low volume trying to say something?

May 06 09:25 PM