Wednesday Outlook: Commodities, Global Markets

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What impressed me today was the absence of serious selling in major indexes, particularly XLY, given the crummy Consumer Confidence data. This tells me bears are basically missing. Volume was rather light and no doubt everyone awaits Thursday’s big employment data before the long holiday weekend.

The tape painters did a good job protecting their positions and propping markets to earn respectable bonuses. It can be an unseemly business and it’s never been more so than currently.

I may not publish tomorrow deferring instead to our podcast interview with Emerging Markets Monitor (London) and the employment data on Thursday. This will be our first since friend and co-host Greg Newton passed away. It sure won’t be the same without him but we press on.

If something significant happens I’ll be back tomorrow same time, same bat channel. In the meantime, let’s see what happens.

Disclaimer: Among other issues the ETF Digest maintains positions in MDY, IWM, QQQQ, QLD, IBB, XLU, DBV, DBC, DBB, XLE, EEM, EFA, EWJ, EWZ, FXI and TUR.

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

[harammph:]

The comments are Cute.

Jul 01 04:49 AM

[Rollerball:]

GE is probably more representative of what constitutes American industry, that BA or CAT. More effective leverage and "in-house" public relations.

Jul 01 06:09 AM

[fatcat:]

@Cetin....I don't think Mr.Fry gives advice to the casual reader of SA...just the facts...

Jul 01 06:36 AM

[Dr. O:]

"Crony capitalism and manipulated markets?" I am shocked, shocked. Big picture: methinks the powers that be have opted for stability instead of a continuation of the negative wealth effect. To wit, stable if not higher equity prices. Much easier to control than home prices, or job losses in the short term.

With the trillions being thrown at this economy, a few billion in futures contracts to prop things up is a rounding error in some secret account. Maybe we have an equity index "put" courtesy the powers that be. Which is not to say markets are headed any further up.

Jul 01 06:59 AM

[AndrewBaker:]

The trouble with manipulation is that after a while no-one knows anymore what is true and so what to do. That is maybe what the situation is now. Markets are going nowhere because there is no clear direction. Buy this rally and lose out when it reverses, or stay out and lose out when it continues? Even with real information, that's always difficult, but market manipulation by Da Boyz and others - using our tax and savings dollars in many if not nearly all cases - makes it near impossible to take a view.

All I'm certain of is that there's a big correction looming, but when is the question?

Investing certainty: gold. Whatever happens, that will not lose you money in the forseeable future.

Jul 01 08:34 AM

[Bull Run:]

American industry; The military comp. (defense) for someone that is planning a war, GE, I would question as an industry, closer to a finance comp. Most of the heavy industry has been long gone since the 70's and the demise of the rust belt. The agriculture, trucking and construction manufacturing industry and the aero industries are all that's left of America's great economy that produced America's wealthly middle class of the past, and these industries have either shrunk (Boeing is all that's left) or are foreign owned CNH is owned by Fiat, Mack trucks by Volvo, Freightliner by Mercedes. Maybe the Tech comp. will be reclasified as industry, but most of their manufacturing is down out country.

Jul 01 08:47 AM

[David Fry:]

The Fryguy is a trend-follower with an attitude.

We're up on the year and have no short positions.

Emotionally, all long positions are taken with us kicking and screaming all the way, but taken nonetheless.

We've made money this year--not a lot mind you--but enough. And we made money last year. So there!

I don't like what's happening to my country and this blog allows me to vent about it.

Jul 01 09:13 AM

[cdur:]

Good job you've done, Dave..!! unemployement will be the key factor..!!

regards from France (& to Frances)

Jul 01 09:23 AM

[basehitz:]

Hey Greenbacks,
I've been following David for a while now. During this rally he posted that he was LONG a number of ETFs adding his skepticism of the market. But as he said, he sticks with the discipline. My reply to that post was that I sold this rally too early and admired his discipline to check my own skepticism. If you stick around here long enough, you will learn how much he adds to the discussion. If however you want to here about Goldilocks, try Dennis Kneale or Larry Kudlow. Both led their viewers off the cliff last year, and continued to cheerlead as their viewers were decimated. And to add insult to injury, after it bounced Dennis Kneale had the gall to say "I told you so". He ignored of course that if you had stuck with him, you'd still be 40% down after the rally. He most recently proclaimed the recession is over. I expect he will get face planted again.

Jul 01 09:53 AM

[robert.b.fe...:]

David: Greetings. I do like the comments bang up or is that sideways job. Seems like all the green shoots have been shot!

Jul 01 09:55 AM

[sarge 907:]

Seems to me that David is only putting the information out for you to read, no suggestion on how to act; that's each reader's personal obligation. If you bet on the wrong horse don't blame it on the jockey, blame it on the dumba-- who placed the bet.

Jul 01 11:04 AM

[sacking:]

Dave
Thanks for posting the HYG chart. I always look forward to your charts and comments.

Jul 01 11:12 AM

[theobannion:]

It's good to hear someone I respect agree w/ me that we are in, and probably have been in, a manipulated mkt since mid-April at the latest - possibly since the end of March. Given any number of indicators with a high degree of correspondence with the direction of the averages, this mkt should have rolled over the second wk in April. But the heavy, and coordinated, buying of a handful of stocks can move indices regardless that the rank-and-file of stocks have been plummeting. Consider the normal drop in the COMPQ for any drop, X, in the percent of NASDAQ stocks above 50 SMA. Do the same for the normal drop for a given drop in the Bullish percent index. As for the handful of stocks: IBM represents 9% of the variance in the Dow. Four stocks dominate the NDX, which dominates the COMPQ. And many issues are listed on more than one index. IBM also figures in the S&P 500 & 100, for example. Ditto BAC. And both figure in their respective sector indices.

I was reading this AM about a head and shoulders forming in the S&P. Similar pattern in any number of other indices, based on my own work. But don't hold your breath for a break below the neckline. If one should come, proceed w/ caution, because more than likely it will be a bear trap, and the unsuspecting bear will be squeezed by the elephant members of the FOP clan - the Friends of Paulson.

"But who shall punish them, Mother?"
"Why, the GOOD people, of course."

A little Shakespeare (probably misquoted) lends a little class.

Best,
Seamus O'Bannion.

Jul 01 11:21 AM

[Rollerball:]

The light at the end of the tunnel is Amtrak.

Jul 01 07:18 PM

[Abe Mishima:]

David, I look forward to your comments after an ugly extended trading session on July 2, where the traders kept taking down many stocks, including big oil, gas, and commodities. The fear of being long has seized investors again. IYR, an ETF I have been watching, got slapped on the face today. I just can't get myself to push the buy button on this one. As for EFA, if you just close your eyes and buy it, it will produce double digit gains by 2010. But that is just my intuition. Every good card player has to have a sense of intuition and timing. And be blessed with (lady) luck. POT was a rollercoaster on Thursdays. Where it stops, nobody knows.

Jul 02 07:35 PM