Tuesday Outlook: Commodities Due to Slow Down?

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I’ve recently been a poor “digest” editor since being recently unaware of some new commodity-based ETFs/ETNs that are coming from Lehman Bros, Barclays and, when approved, an ULTRA commodity ETF from ProShares. Simultaneously, I’m doing some media interviews regarding commodity ETFs. Is that the proverbial “tell” that the overall commodity rally is either coming to an end or at least due for a break?








































Games? Well, we’re heading to the end-of-month and it’s time for the bulls to pull out all the stops to show at least a positive month. And, the large brokers are intent on managing things with AMBAC (ABK) so as not to have to mark down the securities the former is insuring on their books. Failing that would require a very difficult net capital calculation and big trouble.

You really have to wonder about the quality of the rating agencies. If they’re wrong about AMBAC for example, will they have any credibility left? Or, will they count on our short memories? There’s a lot riding on the call they made yesterday.

Have a pleasant day.

Disclaimer: Among other issues the ETF Digest maintains long or short positions in SH, MYY, RWM, PSQ, IEF, GLD, DBC, DBB, DBA, DBE, UNG and EWZ.

Comments

[fjd10595:]

I'm basically repeating something that I said yesterday in response to Paul Davis's article, where he stated that only 4% of CEO's see a recession in 08. To that, I said it doesn't jive with what I have been seeing in the retail stores for months, Sears, Penny, H Depot, the stores are empty- I mean empty. Which makes sense in light of everything else we know, job losses, homes that are going underwater, etc. So how do we equate the two views? Are the CEO's giving an overly positive outlook when asked? Is it a contrary indicator, that is, if the CEO's in mass believe it to be one way, it will be the other?

2008 Feb 26 08:09 AM

[Igneous:]

How about DBJ?

2008 Feb 26 08:50 AM

[Dallas:]

Why don't you show DJP in a commodities ETF article?

2008 Feb 26 08:55 AM

[Igneous:]

Sorry about that mistake in my last comment. Now that I've had my first cup of java I can correct the ticker to the exchange traded note....DJP. It would have been interesting to see your research/comments on this multi-commodity choice where oil/energy wasn't so prominent.
Thanks

2008 Feb 26 09:01 AM

[David Fry:]

DBC = 55% energy while DJP = 33%. It's a good point and I'll consider doing something with it.

2008 Feb 26 09:37 AM

[goldragon:]

You, a bear, get a slap by the afternoon rally in DBA. This is a bird market, don't guess it.
Commodity is in bull market, even if there is a consolidation it is a minor correction! Don't fight with the crowd!

2008 Feb 26 05:56 PM

[cegehle:]

Could you explain how you are using the word parabolic?

2008 Feb 27 11:23 AM