Tuesday Outlook: Commodities, Global Markets

<< Return to page 1 - Summer Doldrums

The CFTC’s Gensler strikes again, this time intimidating iShares from issuing new shares of its commodity tracking fund, GSC (GS Commodity Index Trust) until they understand how they can deal with proposed new position limits in various commodity markets. They’ll probably all have to turn to swaps and do those deals with, guess who, Goldman Sachs (GS), Commissar Gensler’s former firm. Is the CFTC fixing things, or just breaking things willy-nilly? Methinks the latter.





































































That’s it for me today. I’m rather bored having spent most of Sunday in the ER with another recurrence of pneumonia. That’s no way to spend a Sunday at the end of summer, is it? What’s the cure? Rather than getting all these steroids, inhalers and antibiotics, I think some Jack Daniels would work better and be more entertaining anyway. That’s where I’m heading now. Anyway I added a few more ETFs for the fun of it and you can always let me know if there are others you’d like to see.

Anyway, things should pick up tomorrow with more data from Store Sales, Redbook, Home Prices, Consumer Confidence and (what a shock!) more Treasury auctions.

Let’s see what happens. Cheers!

Disclaimer: Among other issues the ETF Digest maintains positions in: SPY, RSP, VTI, MDY, IWM, QQQQ, SMH, IGN, IGV, FDN, IBB, XLY, XLB, XLF, IYR, XLU, GLD, UDN, DBC, USL, DBB, XME, MOO, EFA, EEM, EWJ, IEV, EWA, EWC, EWY, EWT, EWZ, RSX, IFN, FXI, TUR and VNM.

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

[Macro_Man:]

Correct me if I am wrong, but seems like every rally over the past year got aborted when KBW Regionals refused to go along and set up a negative divergence. Looks like it is happening now again. Wanna include KRE? I am short some calls.

Aug 25 06:38 AM

[Dr. O:]

Does the increased inter-connectedness of Wall Street and the Federal Government, and the increased global coordination of our Federal Government with other large Federal Governments, and 0% interest rates, make stocks more or less attractive? More or less safe from a big fall? Do we have a governmental "put"?

Since March, have stock markets been deemed "too big to fail?"

Taking a step back, doesn't it seem that stocks should be trading at lower valuations, bonds at higher interest rates, and the US Dollar should be lower against other currencies?

If so, what could simultaneously guide stocks, US bonds, and the US Dollar all to artificially high levels? Who would benefit from an artificial stabilization? The USA? China? Japan? Europe? The Middle East? Russia? All? For now, is the US too big to fail?

Do previous market cycles no longer serve as guidance? Are we blowing the mother ot all bubbles right now? Should we all be chartists? Do we need to follow the options markets and stock market volume for signs of a turn?

All things considered, are commodities (hard assets) undervalued?

Aug 25 06:53 AM

[Speedspirit:]

How about a look at SLV! Thanks and feel better. Go out and soak up some sun it is good for what ails ya.

Aug 25 07:08 AM

[Macro_Man:]

Hope you feel better Dave, if its any consolation, better now than in the middle of swine flu season

Aug 25 07:49 AM

[Living4Divi...:]

Having gone thru the harrowing last 18 months of high volatility, I want to say that:

"BORING IS GOOD"

Let's hope we have more boredom.

Aug 25 08:08 AM

[prudentinve...:]

Thanks again for your efforts. Good luck with pneumonia. Treat it carefully, and avoid the Jack Daniels in the pm, as alcohol may cause/exacerbate acid reflux that can worsen (or even precipitate) pneumonia.

I am sorry to be off-subject, but the above is from experience.

Aug 25 08:31 AM

[jmward22:]

I like your Jack Daniels remedy. You may still be sick but you don't care :<)).

Aug 25 08:36 AM

[learnmoney:]

Just bought your book and it seems just what I have been looking for so I can compare the US and UK ETF markets.

Aug 25 08:48 AM

[robert.b.fe...:]

Thanks for the insights and work you put in here Dave. Good luck with the pneumonia and best wishes to the Misses. I too am in the wait out mode for now until after labor day unless something really juicy shows up. As usual keep your tarvelling stops tight and your stash of cash in gold. Good luck all.

Aug 25 09:18 AM

[TurtleTrader72:]

There has been alot of talk about the VIX lately, and in my opinion, for good reason. Many traders have noticed that the VIX has leveled off over the last several weeks despite the markets moving higher. This trading pattern indicates a sustained level of distrust that investors are experiencing as this market rally continues. To me, this reveals a resilent (or maybe stubborn) attitude of the bears not to accept or believe in this rally. This type of investor distrust usually supports higher prices as bull markets just love to climb the walls of worry. So until we witness a capitualation of these bears, this market rally will likely continue. From a technical perspective, investors should watch the VIX as this capitulation should show up through a dramatic (or at least noticable) sell off in this indicator. If this was to happen, i think that would signal capitulation of the bears and thus a temporary market top.

Aug 25 09:57 AM

[TurtleTrader72:]

The weekly chart pattern of GLD still suggests that higher prices are ahead for gold. Despite the perceived paused in GLD, investors should notice that the weekly chart pattern has formed a 'symmetrical triangle' which tends to be a continuation pattern. Eventually, GLD will break this consolidation period and likely move to higher levels, possibly to all time highs. As this triangle pattern forms, the trading range of GLD is slowly condensing and likely setting itself up for an explosive move. Although the current trading patten remains bullish for GLD, if the ETF falls back below the $85 mark, i would consider it a very bearsih sign and would suggest investors to think twice about this sector. However, until that happens i remain bullish on GLD.

Aug 25 10:35 AM

[AndrewBaker:]

Not a great deal happening with the current rally spluttering somewhat, but no decisive move down. We probably will stay in a trading range for a a while, which is not exciting in any way. Whilst I expect a reversal at some point, if we do not get any news to start it, this rally could stay up for some time, and even take off again. I'm finding gold getting more attractive by the day: if this doesn't continue, then gold will be a good place to be, and if it does, then gold will go with it, and maybe more so if the dollar weakens more.

Aug 25 02:12 PM

[specks:]

I just want to comment that there is so much noise as information available today that it's tough to sort out trash from truth.
Honestly?
I'm totally confused as to what's really happening!

Aug 25 03:36 PM

[Kelso:]

your_fed: Where do I subscribe?

Aug 25 08:17 PM