Thursday Outlook: Commodities, Global Markets 31 comments
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<< Return to page 1 - The Earnings Season Shuffle
Markets are short-term oversold and could bounce at any time. Based on the McClellan Summation Index however, any rally could prove temporary. Now earnings are coming and Alcoa, despite losing around $5 million per day just to stay open, beat estimates. Bulls have bid the stock higher in after hours trading.
This behavior is what we’ve been witnessing for a long time—lower estimates to Armageddon levels and then beat. It becomes annoying after a while.
Nevertheless earnings are important and we’ve only just begun to see them roll out. Results can alter trends in a major way but today wasn’t pretty despite the late pop from those in the know.
Disclaimer: Among other issues the ETF Digest maintains positions in: MDY, IWM, QQQQ, DBC, USL, GLD, EWA, EFA, EWJ 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.
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This article has 31 comments:
The gold/silver ratio has been going up and has shown the pull back in risk appetite rather well.
I appreciate your charts on the MCD and the Summation Index. I expect that there will be some sort of bounce with the MCD below -60, now. I'll probably use the bounce to lighten up on equities, expecting a roughed road ahead again.
To Dr. O. Rational people understand that global warming is real. The northern and eastern parts of the country have had a very unusual jet stream pattern this summer, bringing in cool Canadian air. So what? That doesn't change the fact that the average temps on the surface of the earth have been rising over the past few decades and that there'is very strong consensus among those that study it that our industrial activities are driving it. I fail to understand the point of denying climate change or how it became political... but strangely it has. We'll need to deal with it one way or another and ignoring it won't make it go away.
NASA says that Mars is also experiencing global warming.
news.nationalgeographi...
I guess our gasses have stretched way out into our solar system.
Maybe the martians need cap and trade too!!!!
The reason the power elite have claimed global warming has been to initiate the carbon tax/credits. Pollution is a problem but Global Warming was just a trend caused by the tilt of the earth on its axis.
On Jul 09 08:33 AM Dr. O wrote:
> Oops. I forgot that this audience consists of a fair number of investment
> professionals and other interested parties who will make a fortune
> off of cap and trade. How? By speculating in, and trading in, carbon
> credits! For something as silly and economically disabling as cap
> and trade to pass into law, there have to be a very powerful group
> of political and financial players who will make out like bandits.
> Such is the way of things.
On Jul 09 07:45 AM Seeking Advice wrote:
> Dave,
> I appreciate your charts on the MCD and the Summation Index. I expect
> that there will be some sort of bounce with the MCD below -60, now.
> I'll probably use the bounce to lighten up on equities, expecting
> a roughed road ahead again.
>
> To Dr. O. Rational people understand that global warming is real.
> The northern and eastern parts of the country have had a very unusual
> jet stream pattern this summer, bringing in cool Canadian air. So
> what? That doesn't change the fact that the average temps on the
> surface of the earth have been rising over the past few decades and
> that there'is very strong consensus among those that study it that
> our industrial activities are driving it. I fail to understand the
> point of denying climate change or how it became political... but
> strangely it has. We'll need to deal with it one way or another and
> ignoring it won't make it go away.
Ditto on the SLV request. A few weeks ago, the Oil/Gas ratio hit some record highs. I thought that gas had to rise or that oil had to come down. Turns out the latter came to fruition, and UNG is hitting a new round of lows.
Question is, will gold (and GLD) come down, or is silver (SLV) due for a bounce?
Artistes
Then there's BMO's Donald Coxe (an old commodity veteran) who argues that sun spots have a major effect on climate. In the last 18 months there has been little sun spot activity which has caused cooling--er, maybe even on Mars (snicker).
On Jul 09 09:19 AM David Fry wrote:
> I'll go with Charles Krauthammer on this one who states: "I'm a global
> warming agnostic. It's obvious polluting the atmosphere causes all
> manner of problems. But there may be other causes and unless every
> country is on board a unilateral decision is economic suicide".<br/>
>
> Then there's BMO's Donald Coxe (an old commodity veteran) who argues
> that sun spots have a major effect on climate. In the last 18 months
> there has been little sun spot activity which has caused cooling--er,
> maybe even on Mars (snicker).
On other matters, it's interesting that commodities are taking a down leg ahead of equities. I think some commodities, being agricultural softs/grains, natural gas, gold (and silver), will recover quickly; but equities are heading down further, although there will be brief rallies on the way.
Until commodities generally start to rise, and stay risen, and comsumer spending goes back up and stays up, we will not have any recovery. Which makes me even happier to still be sitting with my (reverse split) FAZ. A little help selling financial stocks will be much appreciated.
On Jul 09 09:32 AM Windwood Trader wrote:
> I'll bet they have cow flatulence on Mars as well.
I am not here to debate what policy should be, but this is a distortion promoted by industry and people with a political agenda mostly. the same way Phillip Morris said their products did not cause cancer.
This is clear a multifactoral issue and that anything deaing with the total world as a petri dish is very complex.
You need to actually do some research, because volcano's cause global cooling. The clouds and particles reflect sunlight back into space. I believe krakatoa caused a hug very cold winter in europe for a couple years, but It may have actually been another volcano.
If you do not know the science or the issue, don't comment because there are people out there who will believe you.
Glaciers feed streams that depend on the amount of snow in the mountains. less snow, less streams. this is causing huge problems for people who depend on the glaciers in south america.
But, once more, complex issue. As earth warms more water in atmosphere and some place could actually see more snow, with increased melting at same time.
My advice, buy some land in canada in an area with out too much population around it, and a good water supply.
My own theory is that the reason we hav not found intelligent life on other planets is because they tend to kill themselves off quickly in the cosmic scheme. after all we went from radio waves to the ability to destroy our self in about a 100 years. How many millions were the dinosaurs around for. Intelligence is an evolutionary dead end, which is why the universe isn't full of little green aliens. rapid travel allows disease to spread, nukes, genetic engineering, or the ability to alter the environment faster than we can adjust for it, or use resources. The nature of every living organism is to expand until it runs out of resources, or something takes out numbers. What will be the limiting factor I have no idea.
But it will happen
On Jul 09 09:13 AM robert.b.ferguson wrote:
> There is no consensus among rational scientists on this issue. The
> notion that industrial activity is driving the warming cycle is rediculous.
> In case you didn't notice the glaciers began melting before the industrial
> revolution ending the last (not the first) ice age. Add to that the
> fact that every volcanic eruption of MT. ST. Hellens magnitude or
> greater puts more pollutants and green house gas into the atmousphere
> than our species has in it's entire history and the picture is much
> different. Even if we could stop global warming it probably wouldn't
> be a good idea. Glaciation recharges aquafers in the northern hemisphere.
> That would be like keeping hurricanes from hitting the North American
> coast, you wouldn't sustain storm damage but you would cause massive
> drought. Lets not inject wierd science into this.
Now to my question. Are you going to be including thoughts on market reactions to earnings in your technical analysis in forthcoming articles? If so, that'd be great. It would tell the story behind the charts, providing terrific context for those who want to look under the market's hood to see what's down there making it tick.
Thanks.
Wasn't President Obama campaigning for the stimulus package right there in Peoria, Illinois, at the Caterpillar plant? Yes, I believe he was.
From the Chicago Sun-Times:
By Lynn Sweet
on February 12, 2009 4:25 PM
WASHINGTON--Visiting the Caterpillar Plant in East Peoria on Thursday afternoon, President Obama was drumming up support for his stimulus bill.
Go stimulus! Go Kamatsu!
Sheer ignorance. As a scientist who reads the journals 'Science' and 'Nature' weekly I have followed the arguments over the last decade or so reach an overwhelming consensus among 'rational scientists'. The few so-called scientists who disagree have been bought up by the oil companies. This foolishness reminds me of the arguments brought against evolutionary theory by 'intelligent design' advocates, claiming that there are actually scientists who support this drivel, when there is really no 'there there.'
Incidentally, the advances in modeling work that have led to greater consensus in the last few years are largely due to enormous increases in computing speed and power, which have also revolutionized other areas like, oh lets see -- yeah, the financial markets.
As something of a scientist myself, and a former reader of the journals Science and Nature, I can tell you that editorial bias of what articles are published and what articles are not published is very strong.
The editorial board that chooses among articles submitted for review, as well as the reviewers themselves, often tend to lean the same way on on many topics.
The fact that most of the articles published in Science and Nature are supportive of global warming is not proof that global warming is a man made phenomenon, it is merely proof that the editors/reviewers of those journals believe global warming to be a man phenonmenon. "Selection bias" may be an apt term.
In so far as the editors/reviewer are biased, they are biased toward peer-review standards of scientific evidence, rather than uninformed opinion. And I guess since this bias extends to all other scientific journals and conferences, we will never know the real truth about global warming because all the counter evidence is being hidden from us -- yep, sure sounds like a conspiracy to me. Precisely the same argument is used by 'intelligent design' supporters who claim that the evidence for their theory is being suppressed by the scientific 'elite'.
BTW -- what is 'something of a scientist'? You sure don't think or communicate like one.
Your spelling is so "challenged," that it distracts from what you are trying to say. Pick up a dictionary, use a spell-check feature, or send your stuff to a friend for review before publishing.
On Jul 09 09:13 AM robert.b.ferguson wrote:
> There is no consensus among rational scientists on this issue. The
> notion that industrial activity is driving the warming cycle is rediculous.
> In case you didn't notice the glaciers began melting before the industrial
> revolution ending the last (not the first) ice age. Add to that the
> fact that every volcanic eruption of MT. ST. Hellens magnitude or
> greater puts more pollutants and green house gas into the atmousphere
> than our species has in it's entire history and the picture is much
> different. Even if we could stop global warming it probably wouldn't
> be a good idea. Glaciation recharges aquafers in the northern hemisphere.
> That would be like keeping hurricanes from hitting the North American
> coast, you wouldn't sustain storm damage but you would cause massive
> drought. Lets not inject wierd science into this.
On Jul 09 09:42 AM xxxx wrote:
> Your comments at this time are not factually correct. There is a
> great deal of consensus. This is like saying there is no consensus
> on evolution.
>
> I am not here to debate what policy should be, but this is a distortion
> promoted by industry and people with a political agenda mostly. the
> same way Phillip Morris said their products did not cause cancer.
>
>
> This is clear a multifactoral issue and that anything deaing with
> the total world as a petri dish is very complex.
>
> You need to actually do some research, because volcano's cause global
> cooling. The clouds and particles reflect sunlight back into space.
> I believe krakatoa caused a hug very cold winter in europe for a
> couple years, but It may have actually been another volcano.
>
> If you do not know the science or the issue, don't comment because
> there are people out there who will believe you.
>
> Glaciers feed streams that depend on the amount of snow in the mountains.
> less snow, less streams. this is causing huge problems for people
> who depend on the glaciers in south america.
> But, once more, complex issue. As earth warms more water in atmosphere
> and some place could actually see more snow, with increased melting
> at same time.
>
> My advice, buy some land in canada in an area with out too much population
> around it, and a good water supply.
>
> My own theory is that the reason we hav not found intelligent life
> on other planets is because they tend to kill themselves off quickly
> in the cosmic scheme. after all we went from radio waves to the ability
> to destroy our self in about a 100 years. How many millions were
> the dinosaurs around for. Intelligence is an evolutionary dead end,
> which is why the universe isn't full of little green aliens. rapid
> travel allows disease to spread, nukes, genetic engineering, or the
> ability to alter the environment faster than we can adjust for it,
> or use resources. The nature of every living organism is to expand
> until it runs out of resources, or something takes out numbers. What
> will be the limiting factor I have no idea.
>
> But it will happen
The eruption of Mount Tambora in 1815, was the largest known eruption in recent history. The summer of 1816, was know and "Eighteen-hundred and Froze to Death," or the year without a summer. Whether the two events are related would be speculation on my part. See:
en.wikipedia.org/wiki/...
I understand that the wikipedia is "bad" per se, but sometimes it just lends itself to the discussion at hand :)
On Jul 09 07:15 PM Daniel Herkes wrote:
> <I believe Krakatoa caused a huge, very cold winter in Europe for
> a couple years, but It may have actually been another volcano.><br/>
>
>
> The eruption of Mount Tambora in 1815, was the largest known eruption
> in recent history. The summer of 1816, was know and "Eighteen-hundred
> and Froze to Death," or the year without a summer. Whether the two
> events are related would be speculation on my part. See:
>
> en.wikipedia.org/wiki/...
>
> I understand that the wikipedia is "bad" per se, but sometimes it
> just lends itself to the discussion at hand :)
Uniformed opinion doesn't make it past the receptionist. Research contrary to the prevailing view doesn't make it past the editors.
>>BTW -- what is 'something of a scientist'? You sure don't think or communicate like one<<
Thank you.
July 10th, 2009 at 1:33 am by Bill Steffen under Bill's Blog, Weather
We’re on track right now to have the coolest July ever in Grand Rapids. We have now had 11 consecutive days with below average temperatures (which may end today - Friday - because of a warmer than average nighttime low). The first nine days of July were 5.6 degrees cooler than average. The average temperature for those nine days was 64.8 (an average of the nine high and nine low temperatures). The coolest July ever in G.R. (1992) had an average temperature of 67.2 degrees. To get back to even, the rest of July would have to be 2.3 degrees warmer than average and that isn’t going to happen. What’s interesting is that the four (I’m including this year) coolest Julys (1992 - 1996 - 2000 - 2009) have ALL occurred in recent years (the last 17 years). The 10 warmest Julys ALL occurred BEFORE 1956, while eight of the ten COOLEST Julys have occurred SINCE 1956. We have a climate record of 120 years in Grand Rapids. The average July temperature in Grand Rapids for 1900-1952 was 73.6 degrees. The average July temperature from 1970-1999 was 72.5 degrees. The data clearly shows that it is NOT getting warmer in July in Grand Rapids. The temperature record clearly shows that it’s been getting cooler. Other July departures from normal through the 9th: S. Ste Marie -6.7, Marquette -7.2, Kalamazoo -7.8.
July 14 (Bloomberg) -- Japanese and Australian stock futures rose amid expectations company earnings will start to recover and after financial shares rebounded in the U.S.
New York-traded securities of Mitsubishi UFJ Financial Group Inc., Japan’s largest publicly traded bank, were 3.5 percent higher than the Tokyo close. Those of Komatsu Ltd., the world’s No. 2 maker of earthmoving equipment, leapt 4.6 percent on a newspaper report the company likely posted a profit in the April-June quarter. Securities of Australia-based Westpac Banking Corp. rose 2.4 percent from the closing price in Sydney.
On Jul 09 07:19 AM Dr. O wrote:
> Off topic: global warming. Michigan just celebrated the anniversary
> of its most intense heat wave ever! 9 consecutive 100 degree days.
> Oddly, this occurred in 1936. Last winter was one of the coldest
> and snowiest on record. This summer, we've yet to hit 90 degrees,
> and have been running 5-10 degrees below normal per day. Cap and
> trade? OMG what lunacy during a depression! What do rational people
> think of global warming? The Chinese gave it the one-finger salute
> at the G8.