Friday Roundup: Commodities, Emerging Markets

<< Return to Page 1: Clobbered

Van Eck launched VNM (Vietnam ETF) and I’ve been waiting for this one, as have many readers. This will be popular eventually. Below is a heavily annotated “monthly” chart of the basic Vietnam Stock Index.





















It’s hard to understand how bad news yesterday can be so ignored but not today. Maybe it’s just a Friday in mid-August, or investors are getting more hip that bad news really is bad news. The images we’ve posted all week taken together summed things up nicely — the markets are tired, bad news is ignored and then it isn’t for whatever reason. To give the bull its mojo back there needs to be some good news. What will it be? Where could it come from? Perhaps Thursday’s Leading Indicators, Jobless Claims and Philly Fed survey will provide the oomph bulls need.

We’ll see.

Here we are in New Hampshire. It’s a beautiful day. We bought a house just today and that should stimulate US markets, eh? While we wait the next month or so for closing we’re renting a furnished condo at a (gulp) senior’s center. They’re having a barbeque tonight and they keep early hours as you might expect. (Today, it's cocktails at 5 and dinner promptly at 6 both of which may be early for them.) But, we’re good sports and will check out the action.

So, we’ll see you all again next week. Enjoy your weekend.

Disclaimer: Among other issues the ETF Digest maintains positions in: SPY, MDY, IWM, QQQQ, SMH, IGN, IGV, FDN, XLB, XLF, RKH, XLY, XLI, XLU, TBT, UDN, DBC, USL, DBB, XME, MOO, EFA, EEM, EWJ, EWY, EWT, EWZ, EWA, 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

[intercon:]

Been trying to learn whether any actively managed commodities ETFs exist which seek to replicate CTA trend following traders thus avoiding the need to short ETFs in order to profit when commodities prices correct

Aug 15 11:23 AM

[David Fry:]

No, but Rydex has a nice mutual fund for that.

Aug 15 01:53 PM

[Bill L.:]

David, any thoughts on the Baltic Dry Index? You can see a bullish divergence between Feb and March which marked the bottom (for now?) as well as boding well of emerging markets. However, now that index is again diverging from stocks prices, this time to the down side. This is probably a better real time indicator of the world economic health... do you believe this is relevant data to watch?

Aug 15 02:12 PM

[BPYHO:]

D - always appreciate your articles/thoughts but don't you think clobbered is a little too harsh of a title? I mean the market was down close to 2% (rightfully so) during some periods but Hal 9000 managed to save the day and the market only lost .8% on continuing bad news. In my opinion it should've been much more but maybe we are just at the beginning stage?

Aug 15 03:50 PM

[LKofEnglish:]

think collapsing dollar and solid growth in agri-business etf a strong indicator that the fed and uncle sam are completely nuts. the "sign" as it were the "market" is waiting for is the "theory" of inflation being born out. uncle sam has become the 8 trillion pound gorilla and front and center is the healthcare debate which no etf can represent since its failure could be construed as welcome news vis a vis the deficit but a disaster since it shows our leaders being unwilling and unable to create any national purpose anymore and in fact signfies the exact opposite. in other words this is just a phony war. once the "germans cross the line of control" and interest rates soar and the raging inflation WITH high unemployment becomes obvious then we'll see the market cheerleaders stop running around chasing windmills and start placing their money on who gets to montetize to the greatest exent that great for sale sign the fed has placed on all governmental assets state, local and federal. some of these assets are very valuable and include assets like the ny state thruway and certain local school districts which have significant taxing authority that actually gets paid. this is stuff that doesn't show up in any etf by the way and should never be for sale in the first place because they are so valuable. this is the one AND ONLY comparison to the great depression that is valid. the rest of it is a bunch of SA malarkey.

Aug 15 07:04 PM

[Seaferer20:]

As you point out so very well David, markets go up, markets go down. Wall Street is but a part of the humongous global political/economic global transformation now in progress. IMHO we've only just begun. Long-term goals and objectives still rule my investments.
Meanwhile, you (emphasized) enjoy magnificent New Hampshire and don't fret about the small stuff.

Aug 16 09:34 AM

[EconoMarcus:]

David and others interested in Vietnam:
Besides the VNM, there is still the db x-trackers FTSE Vietnam ETF of Deutsche Bank, launched in January 2008. It invests in Vietnam *only* (unlike VNM) and with a TER of 0.85% it's cheaper than Van Eck's ETF. Also its sector weighting is quite different. (BTW: Why is VNM 35% in Cash?) As a drawback in the eyes of some people: It doesn't trade in the US, only UK, Germany, Italy, Switzerland and I think some other exchanges. Anyway, here are the fact-sheets to compare the two ETFs:
www.vaneck.com/sld/van...
www.dbxtrackers.co.uk/...

Aug 16 09:42 AM

[Pasobill:]

UNG may be getting ready to finally have a rally. MACD is slowly showing a positive divergence in this oversold group. Watch for a bounce !

Aug 16 09:53 AM

[elee:]

Congratulations on your home purchase, I'm green with envy for a man who gets to live in New England!

Aug 16 10:48 AM

[GRAFFOL:]

Thanks David. Its always very interesting to follow your graphs and comments.

Glad to hear everything is going great for you and family.

Aug 16 11:53 AM

[mikejack:]

Congrats on your home purchase. Next month my wife and I are closing on a home purchase almost diagonally opposite from you in the US - near Albuquerque, New Mexico! Will need to sell our house in the western suburbs of Chicago next spring so hoping interest rates stay low for the next year....

Aug 16 02:15 PM

[BPYHO:]

Sorry, UNG's book value is about 1$ lower than it is selling at right now. THe fact that they are not issuing new shares hurts and UNG will be going under 10$ within the next 60 days. Quote me on that. Storage capacity almost maxed out, no demand - are these things that will make UNG go up? You'd be best to sell whatever you have of UNG and buy back in after NG goes under 3$........


On Aug 16 09:53 AM Pasobill wrote:

> UNG may be getting ready to finally have a rally. MACD is slowly
> showing a positive divergence in this oversold group. Watch for a
> bounce !

Aug 16 10:03 PM

[Subhankar:]

Great set of charts. Pictures worth several thousand words.

Aug 18 11:43 PM