Friday Outlook: Commodities, Global Markets

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It’s amazing that our hosting service would fail us twice in one week especially after all these assurances that this migration to a new server would be seamless and smooth. The most troubling thing is not being notified by them of this transition well enough in advance to prepare people for any down time. But, someone I know close to the mystical astrological sphere told me the other day that Mercury was in retrograde. This I was assured causes troubles with communications. Don’t you hate it when they’re right?

I guess my technical trading system and loathing of market fundamentals got in sync. This isn’t common but systems always trump emotion even if the latter seem reasonable at the time. Take it while you can get it. So are we lucky or smart to be out? Neither. After all, systems are designed to work not fail. But, as ETF Digest Sacred Cow X intones: Things Change. We’re ready to accept whatever Mr. Market’s next move is.

It seemed clear to me this week that the Street was determined to get secondary offerings done at good prices. Propping a light volume market was an easy thing to do and they got their deals done at the point of a gun to their best clients.

It’s infuriating what’s happening with our government, dollar and bonds. My parents would be shocked and so would yours if you’re my age. They lived through the Depression and fought in a major war. The result was they achieved success and pride in country. Let’s remember them on this Memorial Day and challenge current politicians and officials to do better and make sacrifices.

We have more medical issues on Tuesday and hope the news is good. At least then we’ll know what our schedule will be. Our resident fox made three appearances that I noticed today. It seems odd to see this in a city of this size but the neighborhood is heavily wooded with large lots.

Have a wonderful holiday weekend everyone. Drive safely please.

Disclaimer: Among other issues the ETF Digest maintains positions in: IEF, TLT, TBT, UDN, DBV, DBC, UNG and DBA.


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

[Alan von Al...:]

Bless you, David. Thanks for persevering, sharing your work with us. You're much admired and lots of us are hoping for a clean win. Every day counts.

May 22 04:40 AM

[Daniel Herkes:]

I was inspired by your comments today.

"My parents would be shocked and so would yours if you’re my age. They lived through the Depression and fought in a major war. The result was they achieved success and pride in country."

Agreed, this ain't what it used to be. Pride in country, ethics in business practices, a sound currency, and a great manufacturing base - those contributed to a great nation. Now we run to Walmart for a plastic flag (made in China) to decorate our parents graves! This is painful to watch, and discouraging to even talk about. It's going to take years, but if we all work together we will be better people for our efforts.

May 22 06:30 AM

[doubleguns:]

Seems that there is no appreciation for what we have. Once it is lost maybe that will turn things around and we will struggle to get it back and then there will be appreciation for it. Enough that it will also be protected and defended.

Washington is simply out of control.

May 22 06:45 AM

[Speedspirit:]

David- as always a honest insight to the condition of the markets, Thanks.

Even though my grandparents lived through the Great Depression and fought in a World War that trial of life wasnt a true success. The power elite achieved alot in those days and werent extinguised and so here they are again. And if anything the important lesson from that generation to be remembered was who caused the Great Depression. JP Morgan, Rockefellers, Britain ect and here we are again but when will a New Pecora Commission begin to investigate the market manipulations this time?

Till next week EVERYONE ENJOY this American holiday, Peace

May 22 07:27 AM

[GRAFFOL:]

Being a foreiner that learnt a lot about american pride and sense of responsabilty, having studied there from 1969 to 1971, experiencing the revolution against the VietNam war and how quickly and efficiently the students organized themselves after the killing of the 4 students at the University of Kent in agreement with their Universities, to work for peace, I am still at odds to understand what is happening today to my american friends that see their country and their future being destroyed by interest groups controlling the government to keep the music going at any cost, to paraphrase a today famous Citibank president and manipulating the markets, without organizing another "revolution" to stop the looting.
Everything will come out alright in your family health matters. Many goodwillers are there with their thoughts on you and your wife.
Thanks for your work.

May 22 10:29 AM

[Tom from Ja...:]

David -

Seems like you have the market cornered in change since we met in Bethesda in late January.

With all that change, you end up spending time pretty close to where we met.

Enjoyed your presentation and your company at the conference and dinner.

Enjoying the updates here.

Here's to having your life settle down a bit.

Tom
Cleveland, OH

May 22 11:48 AM

[The Aft Deck:]

Great Article best of luck on Tuesday.

May 22 01:16 PM

[Sober Realist:]

Interesting quote from Cautious Investor:
"Zero Hedge has posted a video of a Fox News interview with Doreen Morgavero and two other players. It's worth the drop over to ZH to watch this video which offers some shocking revelations and insight about recent market activity. From the transcript of the video:

"Something strange happened during the last 7 or 8 weeks. Doreen you probably can concur on this -- there was a power underneath the market that kept holding it up and trading the futures. I watch the futures every day and every tick, and a tremendous amount of volume came in a several points during the last few weeks, when the market was just about ready to break and shot right up again. Usually toward the end of the day – it happened a week ago Friday, at 7 minutes to 4 o’clock, almost 100,000 S&P futures contracts were traded, and then in the last 5 minutes, up to 4 o’clock, another 100,000 contracts were traded, and lifted the Dow from being down 18 to up over 44 or 50 points in 7 minutes. That is 10 to 20 billion dollars to be able to move the market in such a way. Who has that kind of money to move this market?

On top of that, the market has rallied up during the stress test uncertainty and moved the bank stocks up, and the bank stocks issues secondary – they issues stock – they raised capital into this rally. It was perfect text book setup of controlling the markets – now that the stock has been issued…”

May 22 02:28 PM

[AndrewBaker:]

Good broad market coverage and pertinent comment, as always, David. Thanks.

I'd like to direct people's attention to two charts: one is FAZ, which I trade a lot, and the other is the S&P 500 Index, (^GSPC) [or you could look at the KBW Bank Index (^BKX) and SSO].

Today whenever FAZ gets close to or to $5.50, it gets pushed back down (BKX gets supported at 35.80 or near), and at the same time the S&P 500 fails to rise over 894 (SSO falling back at 24.83 or a cent or two over).

To me that is a sign of market manipulation: it is easier to support the banks and financials being one sector with lots of Tarp money and a desire to have inflated stock prices so new offerings may be sold at equally inflated prices, than it is to influence the whole market or at least the part represented by the S&P 500. So, banks get support when they weaken but the wider market represented by the S&P can't push higher as despite programmed buying to support it there is not enough real buying from genuine investors to do so.

Watch the last hour (and I'm writing before it's through) and I bet the banks won't fall back by anything like the S&P will.

May 22 03:28 PM

[David Fry:]

This may be another one of those Tuesday down openings when the Friday before a Monday holiday is also down. That's an old one but it may have a reprise.

Let's see if that happens.

May 22 04:33 PM

[AndrewBaker:]

I was wrong about the banks and S&P, but I'm not unhappy as I'm holding FAZ over the holiday as it just stopped short of my sell order price, fixed higher than I would have usually 'cos I felt that at that particular price, such a drop would signal more to come next week. Let's see how right I may be! Please ...

May 22 04:42 PM

[MichaelAK:]

What is the link in Zero Hedge could not find it.




On May 22 02:28 PM Sober Realist wrote:

> Interesting quote from Cautious Investor:
> "Zero Hedge has posted a video of a Fox News interview with Doreen
> Morgavero and two other players. It's worth the drop over to ZH to
> watch this video which offers some shocking revelations and insight
> about recent market activity. From the transcript of the video:<br/>
>
> "Something strange happened during the last 7 or 8 weeks. Doreen
> you probably can concur on this -- there was a power underneath the
> market that kept holding it up and trading the futures. I watch the
> futures every day and every tick, and a tremendous amount of volume
> came in a several points during the last few weeks, when the market
> was just about ready to break and shot right up again. Usually toward
> the end of the day – it happened a week ago Friday, at 7 minutes
> to 4 o’clock, almost 100,000 S&amp;P futures contracts were traded,
> and then in the last 5 minutes, up to 4 o’clock, another 100,000
> contracts were traded, and lifted the Dow from being down 18 to up
> over 44 or 50 points in 7 minutes. That is 10 to 20 billion dollars
> to be able to move the market in such a way. Who has that kind of
> money to move this market?
>
> On top of that, the market has rallied up during the stress test
> uncertainty and moved the bank stocks up, and the bank stocks issues
> secondary – they issues stock – they raised capital into this rally.
> It was perfect text book setup of controlling the markets – now that
> the stock has been issued…”

May 22 06:14 PM

[Loneflycaster:]

Michael, you can Google for Zero Hedge, or use this link.

zerohedge.blogspot.com/

May 23 12:27 AM

[Sober Realist:]

here is the direct link. A must see:
zerohedge.blogspot.com...

May 23 11:23 AM

[Sober Realist:]

Interesting comments on that video as well:
zerohedge.blogspot.com...

May 23 11:26 AM

[elee:]

Do the daily charts for USO, UCO and UHN now show a cup-and-handle?

May 24 08:14 PM

[gold2us:]

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May 31 04:24 AM