Friday Outlook: Commodities, Global Markets

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We exited most of our equity positions a few weeks ago after the weekly DeMark 9 indicator. (We still maintain some positions in our Long-Term Conservative Growth Portfolio.) That doesn’t always work and many times just marks a waypoint in an intermediate term trend. Indeed, markets rose just after this indicator reading but are now slightly below this level. Where we go from here may be determined by unemployment data being released tomorrow. This market can snap back higher in a heartbeat—that’s just the environment we’re in, especially now that we’re short-term oversold.

click to enlarge


It just seems too pat that October is starting off in this well-predicted bearish manner. That’s just the way of things now. I expect more fireworks tomorrow.

We spent the day awaiting Comcast and Directv hook-ups. Not a lot of fun.

Let’s see what happens and we’ll be on twitter if you’re interested.

Disclaimer: Among other issues the ETF Digest maintains positions in: VTI, XLB, XLF, IEF, TLT, DBC, UDN, GLD, DBC, EFA, EEM and EWC.

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

[Dr. O:]

If I were a hedge fund manager, and I was under performing on the way up, wouldn't the quickest way to catch up be to catch a move to the down side?

If I was a large quasi-governmental enterprise who participated in walking the market up out of the abyss, and the market had gone higher, faster, than just about any market recovery in history, I might be thinking about unloading some merchandise.

If I was long, riding the stock market rally in part based on the recovery from Armageddon thesis, but I wasn't seeing a recovery so much as a stabilization at lower levels, and the stock market was up 50% in 6 months, it might be time to take some chips off the table. FWIW.

Oct 02 07:01 AM

[User 357705:]

A razor thin line between fear and confidence?

Oct 02 07:16 AM

[enigmaman:]

Without Gov support this faux economic recovery is toast, IMF Pres. states the world could face a double dip but as long as Gov support is provided, he doesn't see it and exclaimed how happy he was to find the Gov of the world were not going to pull the stimulus plug so quickly, in other words the patient must remain in the ICU, patient is not strong enough to survive on its own, plugging just IV could kill the patient, not very reassuring and recent new, car sales and unemployment numbers confirms that the USA is no way out of the woods, how can one stay positive about things when we owe our economic existence to the Fed Gov

Oct 02 07:45 AM

[AndrewBaker:]

The charts are showing no upside likely, are rolling over, and threatening big falls. If not out already, sell your equity stocks now: no matter which, you'll be able to get back in at a lower price, and very soon, if that's what you want.

Oct 02 08:39 AM

[Clobbersaurus:]

Employment data was worse than bad. Today will be ugly.

Dip buyers - get your trigger fingers ready

Oct 02 08:53 AM

[predictorma...:]

Good calls lately Mr. Fry, especially getting out last week. Looks like your numbers are pointing to further declines.

Down for a while (October) and then we're heading back up, in my opinion. Buyers on the sidelines all year jump in after much anticipated corrrection.

I have been enjoying the negative spin on the news rather than the total positive spin all during this rally, Example:

Consumer spending up 1.2% in August.

Old spin: "Green shoot, recession over"

New spin "Number influenced by Cash for Clunkers, consumer not really back"

Oct 02 09:08 AM

[SeeTheLight:]

The absence of stick saves and dip buying is very noticeable. The jobs report was worst than expected. I'm thinking we could see another solid triple digit down day on the DOW again. Back to back triple digit down days are something that hasn't happened since this rally began.

Personally while I am already mostly in cash, I think its time to close up most of the long positions and get real cautious. If next week continues to bleed red it would probably be safe to say that recent high was the bear rally top and we may see a sizable correction which of course means it will be time to start looking for good short positions.

Good Luck all.

Oct 02 09:21 AM

[Lobots10:]

Thanks Dave for paying attention to the BDI and SEA..expecting a turnaround in the industry in Nov/Dec....we'll soon see!

Best analysis of ETFs on the web

Great!

lb

PS: you can check us out (or berate our foolishness) at MarketGuru.com...Epic is already on board

Oct 02 09:21 AM

[Bill L.:]

"While the crash only took place six months ago, I am convinced we have now passed through the worst -- and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us."
- Herbert Hoover, President of the United States, May 1, 1930

This is what bear market rallies do. They convert the masses (92% bullish sentiment!) right in time to start the next round of selling. Sorry, we don't end the worst recession since the great depression in 17 months.

Oct 02 10:03 AM

[Hmm?!:]

"how can one stay positive about things when we owe our economic existence to the Fed Gov" Good comment Enigmaman!

I would also add we owe our economic desitution to our Federal Government(s).


On Oct 02 07:45 AM enigmaman wrote:

> Without Gov support this faux economic recovery is toast, IMF Pres.
> states the world could face a double dip but as long as Gov support
> is provided, he doesn't see it and exclaimed how happy he was to
> find the Gov of the world were not going to pull the stimulus plug
> so quickly, in other words the patient must remain in the ICU, patient
> is not strong enough to survive on its own, plugging just IV could
> kill the patient, not very reassuring and recent new, car sales and
> unemployment numbers confirms that the USA is no way out of the woods,
> how can one stay positive about things when we owe our economic existence
> to the Fed Gov

Oct 02 12:56 PM