Tuesday Outlook: Commodities, Global Markets

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So, Obama wants another federal agency for consumer protection. That’s really irritating, frankly.

If you’ve ever been to Washington DC you’ll, like most tourists, be impressed by all the supersized buildings housing many agencies and departments. The last time I was there we drove around the Department of Agriculture. It’s a huge complex. In fact, if you’re in good enough shape physically, you might be able to walk around it without collapsing. Even without doing that, I’d ask you to stand in front of the building and wonder just what all those civil servants, political appointees and assortment of lobbyists do in there. I’m sure there are some sincere and hard-working folks diligently doing their jobs. But, again, what do they do? There must be thousands of workers in there. I asked my learned friend and he said, “Well, they provide education to farmers among other things and so forth.” Hmmm, don’t you think Monsanto, Potash and John Deere can do a better job at that? I do.

But then this agency has offices spread all over the country. More bewildering is that every state has its own Department of Agriculture doing pretty much the same stuff. Now you’re dealing with tens of thousands of civil servants, political appointees and lobbyists. It’s an army of patronage and duplicity.

You can repeat the same process with many agencies. And, then you might ponder the following questions?

Do we have more or less energy since creating the Department of Energy? Has education been improved since the creation of the Department of Education? Don’t stop there, go right down the list.

So, do we need another alphabet agency with an army of civil servants and patronage?

(Okay, I got that off my chest.)

Meanwhile, tomorrow we’ll get Retail Sales, the Empire State Manufacturing Survey and Redbook. Let’s see how they spin it.

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Comments

[unfaire:]

Re Ryu Mei Co:
My guess is that the market has been taken over by the news-independent (or event-independent) computer programs. These programs seem to trade "against" market movements. It means when the market (or, almost any stock) goes down, they buy. The consequence is that the market turns up. And, when the market goes up, they dump the stocks they have just bought and make an instant profit. The market then turns down. This works in "thin" market and "stabilizes" the market. The Dow Jones has been in the mid 9,000 and going nowhere for a while now. Nobody is making money except those computers.

Sep 15 06:21 AM

[David Fry:]

ur2smart4me: Good point about the rat droppings but most seem to be occurring in and around Washington DC, no? Besides each state has Dept of Health officials counting those droppings.........those dirty rats!!!! And, our new Regulatory Czar thinks those rats should have legal representation since these counts are no doubt an invasion of their privacy.

86999: good point! my staff has been urging me to do this but I'm just a creature of habit but will now yield to what's seems the popular way.

Re Ryu Mei: yes HAL is doing that doo-doo that he does so well.

Sep 15 08:33 AM

[Night_Rider:]

The vix and some other charts were not available on the stockscharts site yesterday.

On Sep 15 01:37 AM User 86999 wrote:

> David, thanks for your continued commentary. I notice that you're
> using the McClellan Summation from some other site (decisionpoint?),
> but it is also available on stockcharts ($NYSI), where you're making
> the rest of your charts. Just saying!

Sep 15 08:36 AM

[Night_Rider:]

And where is the money, that the computers are making, comming from? You and I? Slowly transfering credits from your account to theirs? Do we stand a chance?

On Sep 15 06:21 AM unfaire wrote:

> Re Ryu Mei Co:
> My guess is that the market has been taken over by the news-independent
> (or event-independent) computer programs. These programs seem to
> trade "against" market movements. It means when the market (or, almost
> any stock) goes down, they buy. The consequence is that the market
> turns up. And, when the market goes up, they dump the stocks they
> have just bought and make an instant profit. The market then turns
> down. This works in "thin" market and "stabilizes" the market. The
> Dow Jones has been in the mid 9,000 and going nowhere for a while
> now. Nobody is making money except those computers.

Sep 15 08:44 AM

[John Erad:]

Watching the stock market is like watching Family Feud.
No matter what kind of crappy answer or result is given.
Everyone high fives and chants " good answer".
Denile is not just a river in India.
Thanks.

Sep 15 08:45 AM

[Night_Rider:]

I would not doubt that some of them are busy counting their own droppinigs!


On Sep 15 08:33 AM David Fry wrote:

> ur2smart4me: Good point about the rat droppings but most seem to
> be occurring in and around Washington DC, no? Besides each state
> has Dept of Health officials counting those droppings.........those
> dirty rats!!!! And, our new Regulatory Czar thinks those rats should
> have legal representation since these counts are no doubt an invasion
> of their privacy.
>
> 86999: good point! my staff has been urging me to do this but I'm
> just a creature of habit but will now yield to what's seems the popular
> way.
>
> Re Ryu Mei: yes HAL is doing that doo-doo that he does so well.

Sep 15 08:45 AM

[Macro_Man:]

Dave: Do you think S&P is forming a rising wedge? If I recall correctly a rising wedge is always bearish...sometimes a continuation pattern, sometimes a reversal one, but always bearish.

If so, does it give any indication of when the break lower might happen? At the moment, it looks like stocks are trading at the upper bound...may have to trade along the lower bound first before breaking?

Sep 15 08:54 AM

[David Fry:]

stockcharts.com/school...

Sep 15 09:00 AM

[theobannion:]

You should live in South America, David, & the US will look great w/ regard to patronage. The average public employee (related to a politician, which is how he got his job) earns 10 times what his "civilian" counterpart earns for the same job. Which is one half the reasons why pols became pols. The other half is to pocket millions in bribes and steal millions from the treasury. (Okay, so that's thirds, but you get the idea.)

LOL
SOB.

Sep 15 09:18 AM

[theobannion:]

Sorry to keep butting in, but I should add that a lot of the presidents in these "democracies" can change the constitution with virtually the stroke of a pen. Pinochet, Washington's boy in Chile, made himself a senator for life before he "retired" from office (for disappearing thousands of his political enemies). Ain't "democracy" grand?

SOB.

Sep 15 09:21 AM

[theobannion:]

More "rats" in DC.

SOB.


On Sep 15 08:33 AM David Fry wrote:

> ur2smart4me: Good point about the rat droppings but most seem to
> be occurring in and around Washington DC, no? Besides each state
> has Dept of Health officials counting those droppings.........those
> dirty rats!!!! And, our new Regulatory Czar thinks those rats should
> have legal representation since these counts are no doubt an invasion
> of their privacy.
>
> 86999: good point! my staff has been urging me to do this but I'm
> just a creature of habit but will now yield to what's seems the popular
> way.
>
> Re Ryu Mei: yes HAL is doing that doo-doo that he does so well.

Sep 15 09:24 AM

[David Fry:]

Hey, we just moved from South America where we lived the past 4 years. We know all about conditions there.

Sep 15 09:29 AM

[TeresaE:]

Thanks, as always, for the charts and your take on them. I was wondering about the volume yesterday when I remembered that the bulls were telling me how great the world would be when "everybody got back from summer."

Sep 15 10:02 AM

[inthemoney:]

The volume is light because there is no reason to buy at these levels and too scary too short because this is just asking for a short-squeeze. It seems the only traders in the market are the robot kind, which buy on every dip to blow shorts out of the water.
The volume will continue to be light until the market returns to some sort of reality.

Sep 15 11:45 AM

[Chris Petrescu:]

"ramp it, go have a beer, jam it"
"stand in front of the building and wonder just what all those civil servants, political appointees and assortment of lobbyists do in there. "

David - I use your unique technical analysis to broaden my thought process and further dive into any trends you are so careful to point out. I really think that especially with the media herding everyone around like hogs and sheep (into the slaughterhouse??) these days, it's very easy to fall into a tunnel vision state of mind. Your articles keep the mind trained on the larger picture.

I read your articles every day, and today's information was as straightforward and useful as any other, but your commentary was especially awesome. Appreciate the laugh, sir.

Sep 15 03:38 PM

[corey mendel:]

Dave was living in South America for 4 years.


On Sep 15 09:18 AM theobannion wrote:

> You should live in South America, David, &amp; the US will look great
> w/ regard to patronage. The average public employee (related to
> a politician, which is how he got his job) earns 10 times what his
> "civilian" counterpart earns for the same job. Which is one half
> the reasons why pols became pols. The other half is to pocket millions
> in bribes and steal millions from the treasury. (Okay, so that's
> thirds, but you get the idea.)
>
> LOL
> SOB.

Sep 15 04:16 PM

[TraderGM:]

Agree. I'm still laughing


On Sep 15 12:39 AM stnickb1 wrote:

> Please don't stop you are hilarious. You should be doing stand up
> somewhere. Wait isn't that really the grow jobs program? Biggest
> mystery is how to get a job in one of those huge complexes. Thanks
> for the humor release now I will go buy some more calls. lol

Sep 15 04:19 PM

[Jonathan Dang:]

Thanks for the charts as always Dave.

Sep 15 04:22 PM

[realold:]

You are making a joke on the Denial is not a river in Africa thing, right? Wish I got it. I did like your Family Feud analogy.


On Sep 15 08:45 AM John Erad wrote:

> Watching the stock market is like watching Family Feud.
> No matter what kind of crappy answer or result is given.
> Everyone high fives and chants " good answer".
> Denile is not just a river in India.
> Thanks.

Sep 15 10:17 PM

[bricki:]

Thanks for the analysis Dave. I guess I am going to lighten up on equities soon...

Just as a point - Pinochet was a military dictator encouraged by Nixon to overthrow a freely elected socialist government during the cold war. Whatever happened in Chile as a result of this is partly the doing of the US.

I still have relatives living in Chile who suffered greatly from this.

On Sep 15 09:21 AM theobannion wrote:

> Sorry to keep butting in, but I should add that a lot of the presidents
> in these "democracies" can change the constitution with virtually
> the stroke of a pen. Pinochet, Washington's boy in Chile, made himself
> a senator for life before he "retired" from office (for disappearing
> thousands of his political enemies). Ain't "democracy" grand?<br/>
>
> SOB.

Sep 15 11:31 PM