Thursday Outlook: Commodities, Global Markets

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I have a request for Vietnam. Now there isn’t an ETF yet but Van Eck has one in registration. It’s probably the most sought after country market for which requests are received. I can post the weekly chart of the main index below from my internal charts. For now this is the best I can do.





The low volume rally continues apace. Current bullish participants are hopeful retail investors will start phoning their advisors to put money to work in the markets. But, many are still pretty shell-shocked by the devastation done to their portfolios and are reluctant to act. Who can blame them?

I’m more interested in the market action tomorrow and Friday to see if bulls can keep it together. No doubt the “sell in May and go away” mantra will be repeated often. If this market is more like 2003 then buying in May was the right thing to do despite the news at the time.

Let’s see what happens.

Disclaimer: Among other issues the ETF Digest maintains positions in: SPY, MDY, IWM, QQQQ, IGN, IGM, XLI, XLY, XLB, XLF, IYR, DVY, DBV, DBC, DBB, DBA, MOO, EFA, EEM, ILF, IEV, EWJ, EWA, EWW, EWY, 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. Further details, including recommendations, are available to subscribers at www.etfdigest.com.

Comments

[Daniel Herkes:]

Great summary and analysis. I wonder if the retail investors have just learned to ignore the pronouncements from the Fed, and the rest of the government reporting agencies? It seems that the information is so at odds with what the rest of the economic picture looks like, that folks are just thinking for themselves again. Good. I wish this recession was over.

Apr 30 06:47 AM

[Dr. O:]

A 2003-like scenario? News bad, liquidity off the charts, cash is trash, stocks under owned, bonds and cash over owned. With government spending and borrowing at unprecedented levels, is the new trade the old trade: short USD, long commodities, long stocks, short bonds?

Apr 30 07:36 AM

[fatcat:]

David,you must be feeling better...this is your best,most comprehensive post ever...and greatly appreciated.

You really take a lot of work off the little investor,like me...

Hope to be able to join your service one day soon.

Apr 30 08:05 AM

[sheople:]

The feds/government are spending like drunken sailors (as the expression goes). Does anyone in their right mind think that they are not throwing money at the Dow? Somehow the Dow has stayed up pretty well ever since the "rant on Wall street". The fed/government response to all this is a big propaganda, "everything is fine" and a throwing of cash at markets to promote this illusion.

Apr 30 08:07 AM

[EconoMarcus:]

There is a Vietnam ETF:
Deutsche Bank's DB FTSE Vietnam Index ETF, belonging to DB's x-trackers family. In the US that's DBTRF.PK (virtually no volume), in the UK it's XFVT and in Germany it's DXS7.

Apr 30 08:27 AM

[schlumpf:]

Yeah, retail investors take your last money and buy stocks.

Question
here in spain everything is very bad, no recovery, no green shoots.
Is it true that in US now everything is OK now???
Pls give me an answer from US

Apr 30 08:34 AM

[doubleguns:]

Here in the USA house prices are still falling, unemployment is still climbing, credit card defaults are climbing, commercial property defaults are getting started, gas prices are going up, GDP still plunging more than expected, Obama wants to create higher taxes through carbon tax, overall taxes are NOW expected to go up for even the middle class. HOWEVER STOCK PRICES ARE STILL GOING UP.

You will have to judge this one your self.

I think its NOT ok myself and I feel that a lot of retail investers are going to get thier clock cleaned AGAIN.


On Apr 30 08:34 AM schlumpf wrote:

> Yeah, retail investors take your last money and buy stocks.
>
> Question
> here in spain everything is very bad, no recovery, no green shoots.
>
> Is it true that in US now everything is OK now???
> Pls give me an answer from US

Apr 30 08:48 AM

[schlumpf:]

Thanks, so its the same then here.
I dont go long. They want to toast the retail investors again.


On Apr 30 08:48 AM doubleguns wrote:

> Here in the USA house prices are still falling, unemployment is still
> climbing, credit card defaults are climbing, commercial property
> defaults are getting started, gas prices are going up, GDP still
> plunging more than expected, Obama wants to create higher taxes through
> carbon tax, overall taxes are NOW expected to go up for even the
> middle class. HOWEVER STOCK PRICES ARE STILL GOING UP.
>
> You will have to judge this one your self.
>
> I think its NOT ok myself and I feel that a lot of retail investers
> are going to get thier clock cleaned AGAIN.

Apr 30 09:04 AM

[Bull Run:]

I agree with your GLD--comment, stocks want to go higher,whatever the news is.

Apr 30 09:05 AM

[schlumpf:]

What i know about a reaction like this:
It s the end of a bubble.


On Apr 30 09:05 AM Bull Run wrote:

> I agree with your GLD--comment, stocks want to go higher,whatever
> the news is.

Apr 30 09:20 AM

[cuvo:]

Da Boyz have setup the market this morning bigtime. They want out. Pity the fool who goes long now.

Apr 30 09:21 AM

[Bull Run:]

The American personality thrives on excess and bubbles, and it appears to me that the Feds are doing their utmost to push investors out of secure investments, and into high risk. This policy of reinflating the US economy, at all costs, will eventually produce America's biggest bubble.

Apr 30 10:34 AM

[RiskReturnO...:]

Taiwan (EWT) is hottest emerging market now. Suggest all aggressive investors take a look at the technicals (breakout at $10). Fundamentals are excellent -- China growth story, technology rebound, and once in a lifetime change in geo-political environment.

Apr 30 10:42 AM

[David White:]

It may just be that people are tired of being scared, so they are just apathetic to bad news. If this is the case, the new shock of the swine flu may snap them out of their apathy by the end of this weekend. WHO has raised the pandemic warning level to 5. President Calderon of Mexico has ordered a shutdown of all non-essential businesses from May 1-5 in order to slow the spread of the disease. The Mexican peso is down. We are starting to see "real" economic effects from the swine flu. If the number of cases in the US picks up soon, the markets will really fall.

If the number of cases in Mexico grows rapidly in the next few days, we will still likely see a substantial negative effect on the markets. A huge infection pool in Mexico will virtualy ensure the US will be seriously infected.

You point out that many indices are at or near resistance points. They can break out or go downward. This market is overbought. The swine flu pandemic is increasingly more real. I am betting the markets will retreat. Going up on light volume is also usually a good signal that a change is imminent. Thank you for pointing this out.

Apr 30 10:52 AM

[knoc:]

Agree -- please include EWT.


On Apr 30 10:42 AM RiskReturnOptimizer wrote:

> Taiwan (seekingalpha.com/symbo...) is hottest emerging market
> now. Suggest all aggressive investors take a look at the technicals
> (breakout at $10). Fundamentals are excellent -- China growth story,
> technology rebound, and once in a lifetime change in geo-political
> environment.

Apr 30 11:48 AM

[whatanorder!:]

Thank you for being so gracious in responding to folks' requests for specific charts & commentary!!!!!
:-)Shawn

Apr 30 09:13 PM