Thursday Outlook: Commodities, Global Markets

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Was this an overbought “sell the news” market? A key reversal day? We certainly won’t know if this was just a one-off day, but we didn’t see any dip buyers anywhere today. All I can say is markets have been much overbought and were due for a correction. But, it would be surprising, with the quarter only a few trading days away, if bullish portfolio managers would allow any substantial correction. October is another matter.

Tomorrow we get back to normal news like Jobless Claims and Home Sales, not to mention earnings news.

We’ll be back tomorrow and follow us on twitter here.

Disclaimer: Among other issues the ETF Digest maintains positions in: VTI, XLB, IYR, UDN, FXF, GLD, DBC, DBB, EFA, EEM, EWC and EWZ.

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

[cdur:]

love your hilarious comments..!! please : never stop, David..!!

Sep 24 03:56 AM

[bigbear4511:]

Dude you need to change you picture profile. i have never seen a man resting his head on his hand like you have done. I always see women doing that pose ..... in pictures some 15-20 years ago. A life master photographer gringed when i showed him this picture. Remember act natural and not contrived.

Other than that keep up the good work with the articles.

Sep 24 05:03 AM

[Dr. O:]

The market action feels like a steady absence of selling pressure inspired by many vastly underweight equities at precisely the bottom, getting back in. As for returns, 0% interest rates are not appealing. It sure feels like an equity bubble. Like the 1990s, every time I sold I had to buy back in higher. I'm out now anticipating some sort of whoosh down in the next month or so.

Sep 24 07:23 AM

[David Fry:]

The new ETF Digest website will be rolled-out in a few weeks I'm told with many new features, including the uncontrived and (ahem) more masculine Fryguy.

Sep 24 08:15 AM

[nukldrager:]

MACD on the baltic dry and USD headed down almost everything else headed up. Like your dialogue with the charts

Sep 24 08:45 AM

[tweaks:]

Haven't you seen Napoleon Dynamite? David as Uncle Rico rocks!


On Sep 24 05:03 AM bigbear4511 wrote:

> Dude you need to change you picture profile. i have never seen a
> man resting his head on his hand like you have done. I always see
> women doing that pose ..... in pictures some 15-20 years ago. A
> life master photographer gringed when i showed him this picture.
> Remember act natural and not contrived.
>
> Other than that keep up the good work with the articles.

Sep 24 09:21 AM

[AndrewBaker:]

Well, the jobs figures are unexpectedly good. Who would have guessed? They will try anything to make things out better than they are, and so today will start up when it would have been down. Only it can't work for ever: one day we'll see how it really is, and the promised market drop will happen. My worry is that the ramping that has happened will result in an explosive fall reminiscent of 1987. And October is only days away, folks.

Sep 24 09:32 AM

[Alex Trias:]

Couldn't you chalk up yesterday's market sell off to the fact that the S&P500 hit 1080, which is exactly where the top of it's trading gap lies? It seems to me that if you made money shorting the S&P500 last time it was at 1080, you'll short it again this time, too. Based on the market yesterday, it appears others share this view of mine.

The broader question is, does this mean anything? The answer is "no". We should watch to see what the follow through looks like. Thus far, there has been significant follow through on yesterday's sell off, which may or may not morph into the well expected "correction" the experts have not only been calling for, but demanding.

I am watching SPY and VTI to see whether they find support at the bottom of their trading gap range - 104.72 and 52.91, respectively. If we break below those areas as support, then I'd expect the selling to gain some momentum and we could go down to the 30 day exponential moving averages for each security, or below. If, on the other hand, we catch support at those levels, that will signify that sellers have converted into buyers, which favors further upside gains until the NEXT area of technical import (around 1200) on the S&P 500.

Stepping back, markets are, once again, at a key inflection point. This means that as a strategy, it is important to have absolutely zero conviction. We must assume that at this point, the market is a giant, trillion pound coin, spinning above our heads, and we have no idea whatever whether it will come down heads or tails. Anyone brash enough to believe they know which way the coin will fall is apt to get crushed by it, a just reward for hubris. The only real debate is not whether the coin will come down heads or tails, but rather, how to recognize once the coin has fallen, and how to actually interpret whether, in fact, it really is heads or tails. I'll submit my view that the answer lies at $52.91 for VTI and $104.72 for SPY.

Sep 24 11:19 AM

[David Fry:]

Stay far away from nomorefed links which are spam as the dude operates under many aliases and is trying to screw you up.

Sep 24 11:37 AM

[bigbear4511:]

HORRAY!


On Sep 24 08:15 AM David Fry wrote:

> The new ETF Digest website will be rolled-out in a few weeks I'm
> told with many new features, including the uncontrived and (ahem)
> more masculine Fryguy.

Sep 24 12:06 PM

[Macro_Man:]

I can understand how you get 104.72...guess that is where SPY closed on October 6th. But, how do you get 108...I thought it closed at 110.34 on October 3rd


On Sep 24 11:19 AM Alex Trias wrote:

> Couldn't you chalk up yesterday's market sell off to the fact that
> the S&amp;P500 hit 1080, which is exactly where the top of it's trading
> gap lies? It seems to me that if you made money shorting the S&amp;P500
> last time it was at 1080, you'll short it again this time, too. Based
> on the market yesterday, it appears others share this view of mine.
>
>
> The broader question is, does this mean anything? The answer is "no".
> We should watch to see what the follow through looks like. Thus far,
> there has been significant follow through on yesterday's sell off,
> which may or may not morph into the well expected "correction" the
> experts have not only been calling for, but demanding.
>
> I am watching SPY and VTI to see whether they find support at the
> bottom of their trading gap range - 104.72 and 52.91, respectively.
> If we break below those areas as support, then I'd expect the selling
> to gain some momentum and we could go down to the 30 day exponential
> moving averages for each security, or below. If, on the other hand,
> we catch support at those levels, that will signify that sellers
> have converted into buyers, which favors further upside gains until
> the NEXT area of technical import (around 1200) on the S&amp;P 500.
>
>
> Stepping back, markets are, once again, at a key inflection point.
> This means that as a strategy, it is important to have absolutely
> zero conviction. We must assume that at this point, the market is
> a giant, trillion pound coin, spinning above our heads, and we have
> no idea whatever whether it will come down heads or tails. Anyone
> brash enough to believe they know which way the coin will fall is
> apt to get crushed by it, a just reward for hubris. The only real
> debate is not whether the coin will come down heads or tails, but
> rather, how to recognize once the coin has fallen, and how to actually
> interpret whether, in fact, it really is heads or tails. I'll submit
> my view that the answer lies at $52.91 for VTI and $104.72 for SPY.

Sep 24 12:29 PM

[Will.i.am:]

David, thanks for the constant supply of IQ points you give this community!!

Sep 24 12:35 PM