Friday Roundup: Commodities, Emerging Markets

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Remember, the goal of all this money printing and bailouts is to get Chucky feeling good. This is why on this Friday the 13th we put the little monster front and center. One analyst tried to explain market behavior today as a situation when Chucky (the American consumer) is feeling gloomy; he will go shopping to feel better. That was a stretch but if you’re snatched by a reporter to make a comment on market action like today what’s to say?

The week is over and bulls got the headline (a new high) they wanted.

Who are we to argue?

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

Disclaimer: Among other issues the ETF Digest maintains positions in: UPRO, VTI, TYH, UCC, UYM, URE, UXI, TBT, GLD, DBC, USL, EFA, EEM, EET and XPP.

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

[robert.b.fe...:]

Excellent insights as usual sir, hat tip. Who knows maybe the gloom guy is right. Rue21 (RUE) selling clothes for teen agers is up 26% since their IPO Friday. Go figure.

Nov 13 07:31 PM

[Mark Bern:]

As usual, excellent charts and commentary as interesting as can be in this environment. Who knows where we go from here? It would appear, from a technical point of view, that we will find out soon. But, it we head higher, just how far can this market run without the support of fundamentals? I'm not saying that all fundamental data is negative. It's not. It's just that the majority of the good news can be explained by stimulus. Of course, that's what stimulus is supposed to do. But, IMO, the economy hasn't shown the ability to sustain growth without the stimulus money flow. When more of the growth results from non-stimulus sources that can sustain growth even after the stimulus money runs out. Right now, I'm kind of hovering between thinking that, with the majority of the stimulus funds about to hit the economy in 2010, we may pull out or that the economy may contract further from here if the holiday season is too weak. If the later happens, do we take the medicine and let the losers fail or will Congress and the Administration pass another stimulus? I'm in the crowd that believes that another stimulus, if needed, will only put off the inevitable and necessary pain. If $800 billion, plus $700 billion in bailouts, plus the first stimulus of (what was it?) about $350 billion (under Bush), and the deficit spending of $2 trillion in one year (2010) after about $1.7 trillion in the previous year(2009), plus all the loan guarantees by the Fed and Treasury, plus all the loss sharing deals being made by the FDIC, another projected $1 trillion for health care over the next decade (assuming the bill passes the Senate)...well, if all that isn't enough, along with zero percent loans from the Fed, I'm not sure a few hundred billion more down the toilet would be a good idea. Even if we can kick the can down the road a few more years, I have to suspect we'll end up paying the price eventually and I also expect that the price tag (in terms of economic pain) just keeps rising the longer we put it off. But, then again, it may prove to be enough and everything will be great! Right?

Nov 13 08:32 PM

[ebworthen:]

Aren't we close to a 50% retracement in the major US markets?

Wouldn't that be a logical place for the insanity to end?

Wait...I said logical and insanity in the same sentence...seems to fit though.

At what point does the liquidity refaltion bubble pop?

When everyone maxes out their credit cards and decides to buy food instead of pay taxes or other debt?

When everyone walks away from their underwater home and mortgage and goes on public assistance?

When the masses finally realize that there is no money in the banks, only binary data, paper, and promises?

Nov 13 11:39 PM

[TradingHelp...:]

"Large banks and more recently pension funds have suddenly become infatuated with gold. They chant the mantras that gold bugs have known for years: gold is a store of value; owning gold is financial insurance; an ounce of gold will always buy a good suit. The idea is that if the economy continues to weaken and share prices decline, a strategic allocation of the precious metal will hedge and offset some of the losses in the financial sector."

Source: tradinghelpdesk.ning.c...

Nov 14 04:41 AM

[schlumpf:]

Consumer Confidence is now another lagging indicator. The manipulation ( Plunge Protection Team ) let the market go until........ DOW 15.000....20.000..... or 100.000 ????
Bubble pop? But how??
The new spin is now recovery without consumer.

Nov 14 05:09 AM

[mc2406:]

Well said. The professional pols in Washington don't care what happens to the U.S. as long as "the other shoe" doesn't drop until they get theirs and some other sap politician is there to take the fall.


On Nov 13 08:32 PM Mark Bern wrote:
> Even if we can kick the can down the road a few more years,
> I have to suspect we'll end up paying the price eventually and I
> also expect that the price tag (in terms of economic pain) just keeps
> rising the longer we put it off. But, then again, it may prove to
> be enough and everything will be great! Right?

Nov 14 03:45 PM

[User 473905:]

Print Print Print. The biggest job growth industry in American. Screw the old, the savers & our kids to keep wall street speculators rich. Immoral & disgusting, but today that's admired.

Nov 14 05:20 PM

[coolsoupy:]

The end will come when Chucky is exhausted and goes to sleep like Rip Van Winkle!

Nov 15 07:55 AM

[goldhammer:]

Dave, thanks as always for your work and insight.
Considering a couple of things: the 'rollovers' you highlight show some interesting directions. It looks like gold has quite a bit more to gain, as it is not rolling over. But the R2000, as you note, is a better indicator of the overall economic & market health, and it's showing the 'rollover' markers. That, plus the same in financials, tells me that the stimulus has stimulated but the forward-looking elements of the market are expecting a down-leg going into the end of the year. Looks to me like a long, cold winter. /goldhammer

Nov 21 09:57 AM