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D Fry Market Outlook 30 03 2007

Let's not be kidding around, Thursday was a window dressing exercise. [Like the image--not a great effort.] Isn't that against the rules now? Yes, but ask Cramer about rules enforcement please.

The only surprise was a fall in the gold prices which had no logic. Sure, more sellers than buyers would be the simple answer. But, Thursday's action and similar activity from prior end-of-week smackdowns gives credence to the idea that someone upstairs doesn't want to see the metal higher and is willing to act on that desire. Some call it the Gold Cartel consisting of the IMF, the Exchange Stabilization Fund, the Fed and the Bank of International Settlements. Their agents in chief are large investment banks [GS, JPM and so forth].

I'm not a conspiracy buff, but on days like today I'm more sympathetic since today gold should have risen. Now the IMF did say it wanted to or was contemplating selling 400 tons of gold to cover their expenses. They're not making loans anywhere, so there's no fresh income to cover expenses. Rather than cut expenses they're doing just what they advise their clients not to do -- sell their assets for a living.

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Finishing up commodities, let's look at PowerShares DB Commodity Index Tracking Fund (NYSEARCA:DBC) which is the commodity tracking index we prefer given its mix.

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Economic news was good with a upward revision to GDP, but for the week as a whole the news sucked, period.

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Let's look around the horn a little bit.

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That about gives you enough to judge what's going on. Tomorrow the rough-and-tumble month of March is over. I was glad to see February and January go as this just isn't my favorite market time-of-year. In fact subscribers know I wanted to take January off and go tramping in Patagonia. And, I should have and just stayed there for awhile.

We start a new quarter and the markets may show their true hand. Then there's the crazy little man in Teheran to deal with so one never knows.

And, no, I don't know why gold is repeating this end-of-week smackdown. You'll probably be hearing more conspiracy talk this coming week. It may very well be that the IMF is following thru on their previous suggestion that they'll sell 400 tons of gold. That's as much gold as is in streetTRACKS Gold Trust ETF (NYSEARCA:GLD)! Think about that.

Have a good weekend.

Disclaimer: Among other issues, the ETF Digest maintains positions in: streetTRACKS Gold Trust ETF (GLD), PowerShares DB Precious Metals Fund (NYSEARCA:DBP), PowerShares DB Energy Fund (NYSEARCA:DBE), PowerShares DB Commodity Index Tracking Fund (DBC), PowerShares DB U.S. Dollar Index Bearish (NYSEARCA:UDN), iShares Lehman 7-10 Yr Treasury Bond ETF (NYSEARCA:IEF), Telecom HOLDRS ETF (NYSEARCA:TTH), iShares MSCI South Korea Index Fund ETF (NYSEARCA:EWY), iShares MSCI Japan Index ETF (NYSEARCA:EWJ), iShares MSCI Emerging Markets ETF (NYSEARCA:EEM), iShares MSCI EAFE Index Fund ETF (NYSEARCA:EFA), iShares MSCI Germany Index Fund (NYSEARCA:EWG), iShares MSCI Austria Index Fund (NYSEARCA:EWO), iShares MSCI Netherlands (NYSEARCA:EWN), iShares MSCI Australia Index Fund (NYSEARCA:EWA) and iShares S&P Latin America 40 Index Fund (NYSEARCA:ILF).

Source: David Fry's Daily Market Outlook for Friday