Thursday Outlook: Commodities, Global Markets

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The market’s behavior and dishonesty have turned the usually cheery Fryguy into a downright cynic. Whether it’s phony PEs, government data, blatant manipulation, or lying from the authorities, I can only say we deserve better. Below is an apt summation from another cited blogger regarding the ADP report specifically and current conditions in general.

“The ADP report is supposed to be based on actual reports from private industry.

This pervasive pattern of 'good numbers' that result in stock market rallies and the massaging of public opinion, only to be replaced by downward revisions thirty days later, with little notice or quote, is cynical manipulation of the media at best, and a dangerous slide into social engineering by an increasing distortion of 'reality' at worst.”

Jesse’s Café Americain

I may not post tomorrow deferring to Friday’s unemployment numbers and reaction to them.

Let’s see what happens next.

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

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

[Night_Rider:]

Who's profit are they taking?

Jun 04 07:29 AM

[dcb:]

I could not find the place to post, but I had startedt to notice how everything gets revised downward later. this time ISM.

David,
some people post their pictures in a way that you can click on them and make them bigger. can you figure out how to do this please.

If the pattern follows like last week this save above 920 was kind of the false resistance level. this was followed by two days with no real gains, then lift off from 880 last week. no idea what is going to actually happen, but the gap above 920 has not been filled.

whie prop desk trading is down according to tyler durden, I have noticed much more BS with making sure certin levels are not breached. Normally I would tell people not to be investing at this time, but with very easly defined levels I say roll with the punches. new highs are met wth a sell off to resistance.

some securites aren't as much under da boys influence. base metals appears fairly immune.

According to the bollenger bands that resestance level (which I like to use for purchasing) is at 880 now. maybe we will see less manipulation.

If the US market isn't allowed to correct emerging markets won't correct also.

Jun 04 07:39 AM

[dcb:]

Alas,
considering the majority of americans still believe saddam had a role in 9/11 I'm not sure the american people will know the truth.


On Jun 04 05:58 AM User 353732 wrote:

> 1. Markets are not dishonest: it is the people with money and political
> power who are dishonest. Markets process information and telegraph
> conclusions. If the markets are wilfully, frequently and consistently
> fed false information (propaganda, which the markets see through
> and manufactured "data" from official sources and an increasingly
> unethical and incompetent MSM, which markets have a much harder time
> rejecting because these data were once true and credible) they will
> process this false information as true and reach wrong conclusions
> but telegraph them as right.
> 2. It is useful, therefore, to listen to multiple markets besides
> US company dominated equity markets. Credit, commodity, currency,
> real estate, labor and transportation markets, worldwide, all have
> much to tell us. The greater the diversity of markets and the less
> US-centric our focus, the better the ability to parse out the lies
> of the Government, its co-conspirators on Wall Street and its retainers
> in the MSM.
> Despite all the eforts to generate noise and feed false information
> to markets, real facts and truth finds a channel. The more channels
> we access, the higher the probablity we will find true signals and
> right conclusions.
> US equity markets say all will soon be better. Global credit(including
> US federal, state and muni credit ) , commodity , currency, labor,real
> estate markets tell us that high unemployment, and substantially
> higher inflation and interest rates and greater geo-strategic risk
> are just as or even more plausible an outcome than all will soon
> be well.
> Truth will out.

Jun 04 07:41 AM

[dcb:]

the blue lines represent support and resistance. if something closes above or below those lines it indicates further movement in the same direction. A good trade is to buy at the close above resistance, or buy right above support. I prefer the first over the second.

I have asked david to put the pictures up so they can be enlarged for reading purposes. the comment applies is that people talk about random walks etc. yet these lines are faily consistant. that is the amazing thing.
it took me a long time to understand what the grapshs mean. But, I really can't read the numbers well.


On Jun 04 02:21 AM sundrenched wrote:

> I agree that some of the commentary is too cryptic. For instance,
> "Curious how these blue lines work sometimes" (seekingalpha.com/symbo...)...
> I have no idea what that means.

Jun 04 07:56 AM

[dcb:]

with the advent of quants, and the huge trading desks at goldman there are almost no long term investors. they move the market up and down at will.

the goal of the trading desks is in fact to manipulate the market. it doesn't work any other way. stick save influences next day. they way they buy throughout the day with more rapid trades with less volume early (usually) to less frequent selling larger volumes in the after noon after they have suckered people in.

Yesterday they trade each new down level to bounce up and then sell. hoping you will buy into ceach bounce and then they sell under you. they run enugh volume so that unless they support a level they know it won't hold. new low, buy, sell drive down. to this throughout the day. they want you to buy in and them sell with a loss.

You must watch the S&P buying spike patterns. the exact same people every day run almost the exact same patterns and they move the great majority of the volume.

today the futures are up, there should be selling at the open, as the index drops these spikes will increase in frequency and size until the market goes up. they will do some selling, but enough buying to raise things. sometimes the patterns have channels with particular up/down spread. often the spread tightens towards the end of the day. depending on where the maket is they will sell into strength.
via targeted buying I believe they can actually remove shares and keep the market up. Not sure how this is done.

the market should go up when goes below the prior close, yet won't touch the bottom of yesterday. If you go long today be ready to sell. the real bounc up should be in two days after we touch 920. That is the pattern, don't know if it will happen.


On Jun 03 10:14 PM tunaman4u2 wrote:

> "The market’s behavior and dishonesty have turned the usually cheery
> Fryguy into a downright cynic. Whether it’s phony PEs, government
> data, blatant manipulation, or lying from the authorities"
>
> Very true, same with HUGE revisions that are constantly ignored as
> lagging... if its a good report lagging doesn't matter.
>
> If I see another pathetic 15 minutes to go "Stick Save" I'm going
> to go crazy. These are NOT long term investors who panic buy into
> the close &amp; they will sell when the wind blows the other way.

Jun 04 08:13 AM

[MKW:]

The thing that gets me about this last-ten-minutes propping up of the market is.... why? Surely it would be more worth the while of TPTB to allow the market to go through an (apparently) normal, healthy retracement, then jam it up from, say S&P 880 or so. Doing so would give the rally acres more credibility, give TPTB an unobstructed path to profits from shorting for a couple weeks, and probably drive some volume - all the better for them to dump later. That and the Fed and Treasury dept. surely have to be sweating bullets at the rise in interest rates and commodities - both directly due to the ferocity of the stock market upswing.

It's at the point where the propping has turned counter-productive, and yet it's still going on - WTF?

Jun 04 08:20 AM

[dcb:]

On lower volumes (nobody buying) they have to be. the problem is that the sma epeople who do this can turn around and decide to chagne the rules. therefore you never know. look for a new high next monday.


On Jun 04 07:18 AM William Montague wrote:

> Mr Fry first of all thank you for your daily reportage and I wish
> your wife much health and happiness.
>
> Back to business the spikes seem to be getting more blatant day by
> day, they are literally forcing no-one to short the market at all.
> Unfortunately all this will do is just create another mini bubble
> waiting to be popped.

Jun 04 08:25 AM

[jr7107:]

David, thanks for your work. Our thoughts are with your family.

Jun 04 09:58 AM

[AndrewBaker:]

The summer vacation break will enable more manipulation because lower volumes are required to move prices. Now is a time to trade in and out taking small profits at the first sign of a direction change and selling losses very quickly. Long or short, it doesn't matter; just don't run any position too long.

Jun 04 11:55 AM

[dcb:]

there is a difference between what wall street and what is best for our country. surround yourself with bankers telling you how things are and the way they have to be and yoiu actually think you are doing something good when you are not. I am speaking of bernanke. He doesn't understand that bankers would eat their young and slaughter their own families, destroy their country if it keptk their bonus money going. It is a very different morality. the morality is that if it doesn't land you in jail it is Ok to do anything. If you aren't allowed to do it pay and have the regulations removed, or figure out a way arouind them. they are the snakes in the bible telling eve to eat the apple because it is good for her. they can't help it, they are afer all snakes.


On Jun 04 08:20 AM MKW wrote:

> The thing that gets me about this last-ten-minutes propping up of
> the market is.... why? Surely it would be more worth the while of
> TPTB to allow the market to go through an (apparently) normal, healthy
> retracement, then jam it up from, say S&amp;P 880 or so. Doing so
> would give the rally acres more credibility, give TPTB an unobstructed
> path to profits from shorting for a couple weeks, and probably drive
> some volume - all the better for them to dump later. That and the
> Fed and Treasury dept. surely have to be sweating bullets at the
> rise in interest rates and commodities - both directly due to the
> ferocity of the stock market upswing.
>
> It's at the point where the propping has turned counter-productive,
> and yet it's still going on - WTF?

Jun 04 12:46 PM

[dcb:]

Oh look, three thumbs down all from cetin under different names. You are so slick cetin. I wish I had been smart enough to do that to everyone I didn't like.


On Jun 04 07:50 AM dcb wrote:

> Once more this is cetin again under a different name spamming.<br/>why
> can't you go away.
> Just so you know almost everyone on this site has realized these
> new people posting to a web site are always you.
> instead of thinking your the third smartest person, maybe you sould
> think to third dumbest. someone with some brains would know where
> they aren't wanted, would have learned from past behavior, and changed
> their ways.
> The other way to knw your posts is that they always add nothing to
> the conversation.
> May I ask how many site you feel the need to troll?
> Could someone either jam his site, take it down, or look him up and
> get his mother to take away his computer.
> One person was kind enough to post where his domain is registered
> from. Anybody in california want to pay him a visit?
>
> On Jun 04 12:31 AM Volkerr wrote:

Jun 04 12:48 PM

[chleoku:]

That's why Jim Rogers said:

Become a farmer. The world has tens of thousands of hotshot fund managers right now. If I am correct, the financial community is not going to be a great place to be in for the next 30 years.

www.wealthalchemist.co.../

Jun 04 01:14 PM

[MadScientist:]

I agree that the recent influx of "newcomers" who keep including disguised links to Cetin's site are both annoying and add nothing to any ongoing dialogue, there is no concrete evidence that it is actually Cetin doing this (NOTE: I am a newcomer, and am NOT Cetin).

That having been said - I think you are right, but am willing to give others the benefit of the doubt for now.


On Jun 04 12:48 PM dcb wrote:

> Oh look, three thumbs down all from cetin under different names.
> You are so slick cetin. I wish I had been smart enough to do that
> to everyone I didn't like.

Jun 04 01:18 PM

[Deepv:]

I think all you guys are warped. The market is still trading below the panic lows of the first week in October 2008. I think *visibility* on the world is much better TODAY and we are at the same level. Everything in between is just volatility/noise to emotionally confuse those of you who operate minute to minute and do not understrand share prices = PV of all future cashflows, not just tommorrow and certainly non yesterday. Deep

Jun 04 01:49 PM

[David Fry:]

I give..........what's a Cetin? Like a Cretin??

Jun 04 03:17 PM

[Winston Smi...:]

Cetin is a Cretin. He blows up every story with Uber-bull comments and links to his web page.

Jun 04 03:20 PM

[carey_jim:]

Just to set the record straight, even though I think that charts, in themselves, are not useful for predicting the future, I believe they are indispensable for analysis and therefore, indirectly, indispensable for predicting the future.

Whatever the case, your analyses are always reasonable and evidence based, and your charts are the foundation of your evidence.

I was starting to wonder about the Seeking Alpha site itself but this article, short as it is, and all of the reasonable comments it has provoked, are evidence 'green shoots' of market sanity ;)

What worries me is that institutional investors, who use reasonable metrics and algorithms to guide their investment decisions and who have remained on the sidelines during this rally, might 'capitulate' quite literally to irrationality and fuel another disastrous bubble which could end in true financial collapse for the United States.

Jun 04 04:43 PM

[twitee:]

For those less inclined to Scripture, we can readily turn to mathematics and to our instructive friend, the parabola, for clues about what lies ahead. Simply stated, parabolic growth rates herald major changes just ahead in virtually any arena of life, and the parabolic increases in the Federal Reserve’s creation of dollars will prove to be no exception.

The accumulated official US Public Debt of $11.3 Trillion at May 2009 has grown by over $2.1 Trillion in the past twelve months alone, with multi-trillions more ahead and no end in sight. The immediate future suggests massive additional bailouts for commercial real estate, credit card debt portfolios and insurance companies - plus the bubbling up of a Witches’ Brew from hundreds of trillions of toxic OTC derivatives now in jeopardy - as the next major dominoes likely to fall. The usdebtclock.org website provides the following:

US Public Debt $11.317 Trillion
US Government Bailouts $11.650 Trillion
Estimated Currency and Financial Derivatives $642.184 Trillion


Note: In March 2006 the Federal Reserve discontinued its separate publishing of the critical M3 money supply data, and so we are left to the estimate the parabolic increases in the printing of money within the larger ‘Estimated Currency and Financial Derivatives’ data.

At some point in the near future, the market may finally acknowledge that the boasted about US Dollar, the Emperor, is no longer wearing any clothes. And for both Wall Street and the average American alike, the Buck may stop here, at last.

Jun 04 05:57 PM

[Deepv:]

the DJIA should be at 5000 now considering how screwed up the economy is. ppl cant find
---

Why? MSFT with a truck load of cash on 11x P/e vs short end money market paying 42bps? What is you methodology? I don't know what people can't afford stuff. HEre is the mid-atlantic it is fine.

Jun 05 12:00 AM

[Dr. O:]

Being skeptical, you'd ask yourself, what does the Financial-Government Complex want? A stable stock market in which capital can be raised by banks and other debt-ridden companies, low interest rates, high oil prices (spreads the wealth to other countries and forces American into gas-sipping cars), a lower but not collapsing dollar (its about rate of change, not direction).

At this point you can't go gonzo long stocks, or short the dollar, or short Treasuries, or long commodities (except oil). All these trades have worked for the past 3 months, but are clearly running out of steam. If we want to trade with the unseen hand, we need to spend some time in the fresh air of summer, and wait for the market to come to us.

Stocks lower, commodities lower, the dollar higher, Treasuries higher. Then, its back to EEM, EWZ, IFN, RSX, FXI, FXA, UDN, TBT, etc.

Good hunting.

Jun 05 04:00 PM