Wednesday Outlook: Commodities, Global Markets

<< Return to page 1 - Markets Continue to Shrug Off Bad News

Headline writers are a special bunch and I’d sure like to hear conversations between them and their editors as they spin their creations. Sometimes they’re funny and then at other times maddening. But, in all cases they’re trying hard to create a more positive mood for readers, at least when it comes to the markets. Remember who pays their bills.

News headlines were positive regarding good pending home sales data and higher consumer spending (even though heavily weighted by gasoline sales due to higher prices) but the negative news (personal income for example) was ignored.

I don’t know what to make of Schumer’s comments about a “flash trading” ban. The government is into all things regulatory—some good, most bad.

Tomorrow we get employment data from ADP and factory orders.

Let’s see what happens.

Disclaimer: Among other issues the ETF Digest maintains positions in: SPY, SSO, MDY, IWM, QQQQ, QLD, SMH, XLB, XLI, XLF, XLY, RKH, IYR, XHB, TBT, UDN, DBC, USL, DBB, BBD, XME, MOO, EFA, EEM, EWA, EWC, EWJ, EWY, EWW, EWZ, RSX, 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. More detailed information, including actionable alerts, are available to subscribers at www.etfdigest.com.

Comments

[basehitz:]

Speaking of headlines, here’s some of mine:

7/28/09 Corporate insiders more bearish than at any time in nearly two years
By Mark Hulbert, MarketWatch Jul 28, 2009, 1:48 p.m. EST
www.marketwatch.com/st...

8/4/09 Market Ramps Up on Disappearing Volume
by: Tyler Durden August 04, 2009
seekingalpha.com/artic...

7/15/09 Lowry’s Buying Power Index nudges record 1933 low
Posted by Prieur du Plessis
www.investmentpostcard.../

And for comic relief:

6/30/09 To Dennis Kneale: You're An Idiot
Posted by Karl Denninger Tuesday, June 30. 2009 @ Market Ticker
market-ticker.denninge...

Enough fun. (quoting a great market technician) GS targeted SPX 1050. It SHALL come to pass. Ever wonder if there’s any connection between those predictable “stick saves” and why Bazooka Ben and Pelosi are blocking majority support for auditing the Fed’s balance sheet? Just curious. Until the market is allowed to correct, I’ll stand somewhere besides on the RR tracks while I work on my short list. Hope I don’t miss the turn.

Aug 05 06:08 AM

[Macro_Man:]

Again back to the comment on GLD. The general understanding of head and shoulders pattern is that it is a 'reversal' pattern. So, the head and shoulders forms the top of a uptrend and the inverse head and shoulders forms the bottom of a downtrend. Only rarely, is the H&S a continuation pattern.

So, if someone is talking about a H&S bottom for Gold, where is the downtrend preceding it? Gold has been in a secular bull market for the past 8 years.

The more probable outcome is that this is a double/double top and once uncle bucky turns around...either imminent or over the next few weeks, Gold is heading to 680 or so by the end of the year. Silver gets trashed too.

I have been short gold and silver and have gotten hurt recently after enjoying a good ride. Took off 50% of my positions and will take them all off if Gold and silver go up another 2% or so. But, I think these resistance levels holds and they should turn lower this week. In any event, the jobs numbers this week should decide their direction and we will have a much better idea of what is going on by Friday's close!

Aug 05 06:45 AM

[karbonkredit:]

Macro_Man,
Time to drink some coffee, and put my glasses on. I meant to give you a thumbs up. Sorry!

Aug 05 06:56 AM

[Dr. O:]

>>I have been short gold and silver and have gotten hurt recently after enjoying a good ride.<<

We all make mistakes :-)

I thought gold held up very well during the biggest financial market collapse since the Great Depression. My take was in noting gold's resilience in the face of massive forced liquidation of all assets. Now that liquidity is gushing out all over, I see gold making new highs before year end.

Aug 05 06:58 AM

[Gerry Sullivan:]

The move to ban leveraged ETFs by full service brokerage firms is a bit like a Kosher restaurant taking lobster off the menu. They
weren't selling much of it anyway.

Most full service brokerage clients also have an online account and would do the leveraged ETF trades online where the commissions are much less.

Aug 05 07:43 AM

[imex68:]

Meanwhile
Aug. 5 (Bloomberg) -- Goldman Sachs Group Inc. made more than $100 million in trading revenue on a record 46 separate days during the second quarter, breaking the previous high of 34 set in the prior three months.

$100 million x 200 days = $20.000 million in 1 year

I want to be a bankster propped up by the Fed Gvmnt..
8-)

Aug 05 08:30 AM

[boost:]

Dave,
I enjoy your commentary, but am slightly concerned about your recent opening of positions. I know you dont fight the trend but all of your commentary (which I mainly agree with) is touting a impending market correction, of how much is still unknown. Is it wise to open positions when all the fibers of your being are telling you these prices are being manipulated by "Da Boyz" and this bull rally will not last? I suppose one could open positions if they were keeping tight stops on all, as I'm sure you do, but in that case the question becomes, how much are you committing to this current move? And are you leveraging at all with inverse ETFs?

Aug 05 08:59 AM

[David Fry:]

I'm a Gemini "boost"! LOL!

Aug 05 09:25 AM

[Daniel Herkes:]

Hi David.

Thank you for the though provoking charts and tidbits of commentary. Thanks be to the blogosphere in general. I do not think the intelligent reader of news and information can afford not to diverge from the mainstream spin doctors. If they do so it is at their own risk. Despite my advancing age and growing malaise I can really understand the distaste the founders of the USA had for royalty and seamless vested interests. Whenever the Kneale's open their mouths I read deeper into the likes of Seeking Alpha, and increasingly Tyler Durden.

Aug 05 09:33 AM

[robert.b.fe...:]

Stay off the RR tracks and catch as catch can on the dips. Set your benchmarks and place your stops accordingly and you should do well even when the market movers start coming back and put a check on Da Boyz. Good luck all it's time to do some actual work.

Aug 05 09:49 AM

[DellRocks:]

Kneale is an asshole


On Aug 05 06:08 AM basehitz wrote:

> Speaking of headlines, here’s some of mine:
>
> 7/28/09 Corporate insiders more bearish than at any time in nearly
> two years
> By Mark Hulbert, MarketWatch Jul 28, 2009, 1:48 p.m. EST
> www.marketwatch.com/st...
>
>
> 8/4/09 Market Ramps Up on Disappearing Volume
> by: Tyler Durden August 04, 2009
> seekingalpha.com/artic...
>
>
> 7/15/09 Lowry’s Buying Power Index nudges record 1933 low
> Posted by Prieur du Plessis
> www.investmentpostcard.../
>
>
> And for comic relief:
>
> 6/30/09 To Dennis Kneale: You're An Idiot
> Posted by Karl Denninger Tuesday, June 30. 2009 @ Market Ticker<br/>market-ticker.denninge...
>
>
> Enough fun. (quoting a great market technician) GS targeted SPX 1050.
> It SHALL come to pass. Ever wonder if there’s any connection between
> those predictable “stick saves” and why Bazooka Ben and Pelosi are
> blocking majority support for auditing the Fed’s balance sheet? Just
> curious. Until the market is allowed to correct, I’ll stand somewhere
> besides on the RR tracks while I work on my short list. Hope I don’t
> miss the turn.

Aug 05 10:40 AM

[Poor Texan:]

I agree with your comment on Chicago schools. I had to take many remedial courses after being released from custody,oops, I mean graduated. The Chicago public schools are not a model for anyone except maybe Iran and North Korea. But they do pay the wardens, oops again, teachers well.

Aug 05 11:10 AM

[AndrewBaker:]

It doesn't matter right now about any fundamentals: banks are going up - not least because of the margins they're making between their cost for the money they're actually lending and the cost they put on the loans - and so are any and every commodity. If I could commoditize my trash, I'm sure I'd get a good price. Any recyclers out there interested?

Well, wait for a pullback, then get in long with very tight stops, and maybe we can all make a buck or two before the market falls back again in the fall. (So that's where it got its name!)

Aug 05 12:04 PM