Wednesday Outlook: Commodities, Emerging Markets 6 comments
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Often when markets are much extended and when a new calendar period starts, previous themes and trends can reverse--abruptly. And, based on charts we’ve posted here over many weeks, you could readily see how overbought/oversold some sectors were. Yesterday the long commodities/short financials trade was reversed if only temporarily.
Also, a key element within this trade was being short the dollar and long precious metals which was also reversed. While the dollar rallied somewhat, precious metals were crushed. Let’s see how far into the quarter they can take that squeeze play.
Bulls were aided yesterday by normal first of month money flow and contributions to retirement accounts that investment managers invest immediately.
Many pundits and media have been proclaiming a recession at hand [some even suggesting we’re in a depression] and that we’re in a bear stock market. Neither has been born out by the facts or data yet. This condition, and with market trends sideways for the past few months, is why we’ve maintained cash positions exceeding 75%.
The Paulson letter is a real eye opener and confirms what most surmised: that the full faith and credit of the U.S. Treasury is behind any market meltdown. Bears beware.
Have a pleasant day.
Disclaimer: Among other issues the ETF Digest maintains long or short positions in SH, RWM, IWM, PSQ, MYY, IEF, GLD, USO, EFA, EEM and FXI.
Often when markets are much extended and when a new calendar period starts, previous themes and trends can reverse--abruptly. And, based on charts we’ve posted here over many weeks, you could readily see how overbought/oversold some sectors were. Yesterday the long commodities/short financials trade was reversed if only temporarily.
Also, a key element within this trade was being short the dollar and long precious metals which was also reversed. While the dollar rallied somewhat, precious metals were crushed. Let’s see how far into the quarter they can take that squeeze play.
Bulls were aided yesterday by normal first of month money flow and contributions to retirement accounts that investment managers invest immediately.
Many pundits and media have been proclaiming a recession at hand [some even suggesting we’re in a depression] and that we’re in a bear stock market. Neither has been born out by the facts or data yet. This condition, and with market trends sideways for the past few months, is why we’ve maintained cash positions exceeding 75%.
The Paulson letter is a real eye opener and confirms what most surmised: that the full faith and credit of the U.S. Treasury is behind any market meltdown. Bears beware.
Have a pleasant day.
Disclaimer: Among other issues the ETF Digest maintains long or short positions in SH, RWM, IWM, PSQ, MYY, IEF, GLD, USO, EFA, EEM and FXI.
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JJC