Wednesday Outlook: Commodities, Global Markets

<< Return to page 1 - Surprise Selling

A pause? Well why not. Earnings are still coming in and with markets much overbought interim nervousness remains. Barring any serious news I’d thought we’d have a big up day but investors ran the other way because of slack housing news, which seemed a little odd.

How about Jesse’s Café Americain really knocking the cover off the ball with excellent investigative journalism regarding the “color of money” in government, courtesy of Wall Street. It’s enough to make you sick.

click to enlarge


If you want to see the rest just go to his website.

That’s it for me. More earnings on tap.

Let’s see what happens and you can follow our pithy comments on twitter.

Disclaimer: Among other issues the ETF Digest maintains positions in: SPY, RSP, VTI, MDY, IWM, XLB, XLY, UDN, DBC, USL, XLE, BDD, 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

[Rantor:]

Why is no one talking about the fact that the profits at many of these companies is on a lot less total revenue. CAT down 44% year on year! That is not good news and speaks to the bigger trend in the economy, collapse.

Oct 21 05:51 AM

[Daniel Herkes:]

If not collapse, then a weak slow growing economy with a lot of slack. The 800 unemployment gorilla sits in the room. How about those contributions? Wow.


On Oct 21 05:51 AM Rantor wrote:

> Why is no one talking about the fact that the profits at many of
> these companies is on a lot less total revenue. CAT down 44% year
> on year! That is not good news and speaks to the bigger trend in
> the economy, collapse.

Oct 21 07:17 AM

[popey:]

Guys, wait until bonds hit 10%+. Then the party will be over as all exits will be stuffed with stampeding traders. A catastrophe is unfolding as we enter the eye of the storm.

Oct 21 08:23 AM

[predictorma...:]

Market feels weak, with a possible big down day lurking out there somewhere.

Oct 21 08:51 AM

[robert.b.fe...:]

Great job on the charts and comments David, thank you. How are the new digs coming along? It seems like we may be seeing the start of a correction but one has to wait and see. As for the "journalists" (and that word must be used very loosely these days) at CNBC, MSNBC, NBC etal... There aren't any. Journalism died in 2008. I think it's hilarious the way team Obama is attacking any one or any thing that isn't in the tank for them. Jake Tapper at ABC actually went after the propaganda minister Gibbs yesterday. What a shock. Could some one be trying to bring journalism back from the dead? I wonder if he will be reprimanded? For the answers to these questions and a lot more deception tune in to the next exciting episode of "As the stomach turns.".

Oct 21 09:26 AM

[Alex Trias:]

Sometimes, the way you can tell you're at an inflection point is that stuff stops making any sense. Futures indicate a positive start, and the market falls. Or the markets sell off on good news, fail to rally off technical support points. At first, you just shrug your shoulders and chalk it up to market wierdness. Until a pattern of wierdness starts to take shape.
One day does not make a pattern. But still, the longer you find yourself scratching your head and wondering why the market is behaving in surprising ways, the more you start to think change may be in the air. I suggest keeping a keen watch for some sign of trouble in any corner of the asset markets. A large defaut on a commercial mortgage, a currency going into a tailspin. Anything that could matter, but it is not yet clear whether it ultimately will matter. I am suggesting a high level of scrutiny is appropriate because I am reminded of some strange, unanticipated churnings in the equities markets right before the subprime market blew up in 2007. I am not suggesting in any way that we are on the verge of any renewed financial collapse (I'd have no way of knowing or even venturing a guess about that). I'm only suggesting that if equities start behaving oddly for any meaningful length of time, that could be an indication that something is on the horizon, and if that something starts to materialize, you'll want to recognize it ASAP and act accordingly.

Oct 21 09:33 AM

[bricki:]

Stocks are high now. The economy is not exactly robust. I don't think it is necessary to resort to doom and gloom scenarios to explain why people might be taking some profits now.

Oct 21 09:55 AM

[Alex Trias:]

Agreed. Doom and gloom are not required to explain things. And in any event, today we seem to be seeing some surprise buying. Garden variety churning, sector rotation, or just locking in some hefty gains? May very well be any and all of the above. Having absolutely no conviction one way or the other seems the more cautious attitude.

Oct 21 10:07 AM

[David Fry:]

yesterday the market should have gapped higher but did the opposite. today the preopen suggested a gap lower but we were higher.

so, as you say, "having absolutely no conviction" is probably the way to watch and trade this spectacle. this is the essence of technical and systematic trading. tune out the noise and follow the tape.

i have an attitude clearly, but that's just for fun. if i had to trade my attitude i'd be broke.

Oct 21 10:24 AM

[Emerald:]

Tune out the noise. The MSM doesn't cover campaign contributions so they can maintain "access" to politicians and continue to report the "noise". Democrats and Fox News jousting is just part of the distracting noise. Who cares. David is correct in that you should simply watch the tape. Government debt will be monetized over the next ten years with higher inflation (but not now) and higher interest rates. Stocks may continue to rise on increased earnings bougth with job layoffs, b ut without increasing revenues, the emperor has no clothes. Look for a 10% correction over the next few months. When that happens, buy.

Oct 21 10:57 AM

[Graham and ...:]

"Cut and run" seems to be the order of the day.

Oct 21 11:00 AM

[bluebare:]

PPH

Oct 22 01:20 AM