Tuesday Outlook: Commodities, Metals, Global

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There are a lot of moving parts to this market’s behavior and trends. Do I think the government or any of its agents were buying the DJIA today? If they ever were in markets, today would’ve been it in my opinion. If it wasn’t them it was some hedge fund’s computer program kicking trades in.

There are four fun-packed days to go [including next Monday] to determine if there are more failures and/or bailouts. Today we get the PPI followed by LEH and GS earnings which should be interesting. Further the VISA IPO is being priced and the street really wants to get that done. Then there’s the Fed in the PM.

I don’t like what the Fed is doing and would just as soon let some banks fail, clean things out, and let some astute scavengers pick up the pieces. For all practical purposes BSC failed anyway and JPM was gifted the remains by the government with a taxpayer backstop. This seems dumb.

Most of the 14,000 people at BSC will be out of work and their savings lost. In the meantime, JPM gets a sweetheart deal while Jimmy Cayne plays bridge comfortable with his $120M payout. This sucks! There will be a lot more to this Enron-like story over time.

Many BSC employees will be drowning their sorrows at some pub this St. Patrick’s Day and the color of their beer won’t be green, more like blood-red. Give them some cheer if you have a chance. Oh, I just remembered they shared $3 billion in bonuses last year so maybe just smile.

Let’s see what happens next.

Have a safe St Patrick’s Day!

Disclaimer: Among other issues the ETF Digest maintains long or short positions in: SH, SDS, MYY, MZZ, PSQ, QID, IWM, RWM, TWM, IEF, DBC, DBA, DBB, USO, GLD, GDX, EEM, EEV, EFA, FXI and FXP.

Comments

[bhakta]

Thanks David, always appreciate your insights and charts

[Matt Blackman]

Very good analysis David as always! Check out the potential Head & Shoulders top forming on the EEM and that we are very near the slightly upward sloping neckline on my weekly chart. If it breaks down, I calculate the minimum downside target at 86 which is a 32% drop from yesterday's close (see tradesystemguru.com/co... )

Matt Blackman - TradeSystemGuru.com