Thursday Outlook: Commodities, Global Markets

<< Return to page 1 - The News Fails to Support the Rally

Dave’s Daily turns to daily charts since occasionally, like now, they’re significant. You can see clearly how many markets have responded to the 200-day moving averages. Sometimes these act as resistance and then support if surpassed.

Markets often end a run in an ugly manner and this may be what’s taking place now. It’s really hard to know but clearly the news hasn’t supported this major rally despite stress tests, green shoots and other happy talk. For a trend follower, the news must follow the trend. That’s the fuel any trend needs whether bearish or bullish. I don’t see the supportive news. The markets are getting oversold and Da Boyz could step in at any time to push things back up. They have a lot at stake in that regard.

Finally, I won’t be publishing tomorrow as my wife will be undergoing surgery tomorrow and I’ll be at the hospital all day.

Disclaimer: Among other issues the ETF Digest maintains positions in SPY, MDY, IWM, QQQQ, XLY, XLB, XLU, IYR, IEF, TLT, TBT, UDN, DBC, DBA, MOO, EFA, EEM, 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. More detailed information, including actionable alerts, are available to subscribers at www.etfdigest.com.

Comments

[Wizler:]

Could Da Boyz take some profits on equities and then trade up commodities for a more surgical, less expensive recovery story......BTW loved the Being There reference in an earlier post, I was thinking the same thing. Best to your wife

May 14 07:13 AM

[Shabroo:]

I agree with your analysis and sentiment. We just came through a HUGE rally - it's time to lighten up on the long side, and wait to see where things go - not a time to be greedy.

Good luck with your wife! I was reading the heart breaking story on one of your last informative articles. She looks young and healthy, and you guys seem to have caught it early - so all the things are working in your favour. My father is going through a similar battle recovering from 2 months of chemo/radiation from a tumor in his throat, so I know what you're going through to a certain extent. My best to you and your wife.

May 14 07:29 AM

[Seeking Advice:]

Dave, hope all goes as smoothly as possible for your wife tomorrow. Like 'Boom_Bust' above, I've had trouble with the recent persistent optimism on the economy. The consumer is weak and has to be - they've had real wealth loss in terms of home values and investments and for many the loss of a job or reduced salaries. Consumers have to save more to make up for these real losses and to be prepared for a poor economy going forward. How could this can lead to a return to prosperity as we knew it (which it seemed as if the stock market was looking for)?

I apparently don't know much about markets, but I get uncomfortable when I see such a dichotomy between what seems intuitive about the state of the economy versus the recent performance of the equity markets (which in theory are tied to that economy).

May 14 07:35 AM

[Stock Yid:]

Hi Dave,

I hope your wife has a successful surgery and fast recovery.

May 14 08:25 AM

[Greyowl:]

As aways, the analysis is impeccable. Thx.

But no doubt - today's event - your wife's surgery is far more important than anything else. Good luck to Francie!

May 14 08:35 AM

[NanoTot:]

Dave,

You're the man Stewart wants Cramer to be. Best wishes on the surgery.

May 14 09:00 AM

[ceh9876:]

Great article, good luck to your wife with her surgery.

Charlie

May 14 09:07 AM

[GRAFFOL:]

Dave,
Un fuerte abrazo y mis oraciones estan con Uds.
Gonzalo

May 14 10:18 AM

[AndrewBaker:]

Good luck tomorrow.
......
Everybody is waiting for everybody else, seems like. How about this scenario: the US has officially been saying since not far into this year, through one mouthpiece or another, that there are green shoots. So, the emerging markets, and especially China, start ordering raw materials and getting set for some action, which is seen happening in the US. This talk of green shoots plus something stirring overseas gets the US markets moving whilst we are in March. China and emerging markets everywhere notice and gear up some more. The US sees this and keep buying. But wait: if the US is rising because of green shoots and movements abroad, and abroad is moving becuse of green shoots and movement in the US, where are these green shoots and what is the good news?

{Deafening silence}. No, I don't know either.

Oh, maybe time to start selling then whilst there are still some people out there buying the dips.

Still, I'm sure I heard somethere that things are getting better, but I just can't seem to find out what it is that's improving.

May 14 10:19 AM

[jmward22:]

Thanks for your chart comments.

All the best to Francie tomorrow.

Thanks,
Jim

May 14 10:56 AM

[RSAAKKS:]

for the short term at least, SDS and SKF make more sense for a trade while the market tries to find support underneath. So many sectors, all filing at the 200d MA is not just a concidence ad Dave has pointed out.
Best wishes for your wife Dave, hope all goes well.

May 14 02:00 PM

[Dr. O:]

US Stocks up = Foreign markets up = commodities up = dollar down

US Stocks down = Foreign markets down = commodites down = US dollar up

The leading sector on the upside was financials, as it is on the downside. The leading market cap on the upside was small caps, as it is on the downside. On up days everything goes up with highly positive breadth across most sectors, on down days there is highly negative breadth across most sectors.

There's little discrimination between companies, sectors, countrys, stocks, commodities or currencies. You're long one you're long them all, you're short one you're short them all.

Except the Yen.

May 14 03:08 PM

[Herr Jordan:]

It's about sound bites and advertisements not fundamentals.

Reason and reality checks are irrelevant until the inevitable crash when almost everyone gets trampled on the way to the exits, and at which time the blame game starts.

America is NOT Nazi Germany but the history of Hitler and the Nazis teaches us that the most reasonable people, who warned that Hitler and the Nazis were criminals and thugs, were ignored from 1933 until 1943 (Stalingrad) at which time it became clear that the Nazi party would go down in flames, in a Gotterdamerung of defeat.

But even after Germany was buried in rubble the most prominent Nazis came back to rule post World war II Germany and the leaders of the Gestapo (the Nazi secret police) were enlisted by the American government to transform the bungling, ineffective American OSS into the 'mighty' CIA.

After all the economic bubbles in the United States since the end of the Vietnam war it is hard to blame Joe the investor for seeing Wall Street as a giant money tit in the sky that will never stop delivering.

Even when the crash comes, and whatever form it takes, the same American hucksters and advertising machine will proclaim that huge profits will be made cleaning up the rubble.

That's the way it is in Las Vegas, America. It's about sound bites and advertisements.

What desert? What water shortage?

Blue Skies Forever.

May 14 04:40 PM

[cannedpawn8:]

Love your charts, bless your wife and you.

May 14 06:30 PM

[User 410283:]

"Don't let anything or anybody steal your joy." Her recovery is greatly dependent of your strength and optimisim. The power of prayer is awesome. Yall are blessed to have each other.

May 15 02:45 AM

[dcb:]

dbb makes for an interesting chart. it looks squeezed between 50 and 200 day moving avg. I am looking for break below the 50 then a move up as the 50 crosses the 200 for a potential long term buy set up. they are pretty close. worth watching this.

May 15 03:31 AM

[cdur:]

As Jim....

Thanks for your chart comments.

All the best to Francie tomorrow.

Thanks so much,

regards from France..!!

May 15 09:25 AM

[David Fry:]

Thanks for your comments everyone and that includes Cetin.

May 16 09:18 AM

[allinstox:]

David - great commentary, thx. My best to you and your wife.

May 17 10:50 AM

[any mouse:]

Hi AndrewBaker
“Oh, maybe time to start selling then whilst there are still some people out there buying the dips.
Still, I'm sure I heard somethere that things are getting better, but I just can't seem to find out what it is that's improving.”

…and just what does one do with the $ that’s raised from selling ? Cash will be worth – less if the present trends continue.
Any suggestions ? Seems they got us all ““buy” the short and curlies”



On May 14 10:19 AM AndrewBaker wrote:

> Good luck tomorrow.
> ......
> Everybody is waiting for everybody else, seems like. How about this
> scenario: the US has officially been saying since not far into this
> year, through one mouthpiece or another, that there are green shoots.
> So, the emerging markets, and especially China, start ordering raw
> materials and getting set for some action, which is seen happening
> in the US. This talk of green shoots plus something stirring overseas
> gets the US markets moving whilst we are in March. China and emerging
> markets everywhere notice and gear up some more. The US sees this
> and keep buying. But wait: if the US is rising because of green
> shoots and movements abroad, and abroad is moving becuse of green
> shoots and movement in the US, where are these green shoots and what
> is the good news?
>
> {Deafening silence}. No, I don't know either.
>
> Oh, maybe time to start selling then whilst there are still some
> people out there buying the dips.
>
> Still, I'm sure I heard somethere that things are getting better,
> but I just can't seem to find out what it is that's improving.

May 17 04:16 PM