Thursday Outlook: Commodities, Emerging Markets

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When bulls are in charge, they’ll latch on to any number that suits their purpose even if it’s a fraud like the CPI. These portfolio managers and trading desks are under tremendous performance pressure and as a consequence have an itchy trigger finger.

To the average Joe there is nothing positive in the news. But if the Fed can give their IRA or 401K a little boost maybe they’ll feel better. This rally is built on a lot of cash on the sidelines courtesy of our central bank[s].

I’m not impressed so far by the volume and you must remember this is options expiry week and lots of manipulation by professionals will take place in advance of expiration. The floor traders know where the majority of expiring options strike prices reside and they’ll do their best to go after them.

We hit the road again today and posting might become iffy again until next week.

Have a pleasant day.

Disclaimer: Among other positions the ETF Digest maintains long or short positions in MDY, IYR, TLT, TBT, UUP, XLB and ILF.

Comments

[CrossProfit:]

Nice post.

Question; why do you use mid November 2007 as your base for SLX? Wouldn't it make more sense to use 02/2008 (after Q4 earnings) as a comparison base? After all, the majority of annual contract resets occur in the beginning of the year, not towards the end of the calendar year.

Just asking...

CrossProfit

2008 May 15 05:19 AM

[Scared Stiff:]

I could be wrong here, but I believe that these charts are strictly technical interpretations, with no regard for fundamental factors.

2008 May 15 09:17 AM

[David Fry:]

You're right scared stiff. Cross Profit...SLX doesn't really relate to futures contracts since it consists of stocks. Are you thinking DBB instead?

2008 May 15 09:56 AM

[proseadvocate:]

I like the thoroughness and scepticism but, would like a little more layman's explanation in the commentary boxes relating to technical charts

2008 May 15 10:11 AM

[Geoffrey Lordi:]

David,

I appreciate your thoughtful work. And, while I realize that you cannot publish data on *every* etf, do you have technical analysis for some of Currency Shares' products? What of other country etfs (some of which are relatively new), including Mexico (EWW) or Latin America's other growth engine, Chile (ECH)? And how about some of the less covered products, including South Africa (EZA), Israel (EIS), and Turkey (TUR)?

Thx,
GL

2008 May 15 10:32 AM

[User 150045:]

Don't change a thing David. Your posts are just fine.

A reader in Blighty

2008 May 15 11:42 AM

[whidbey:]

This possibly the best thing SA does: provides summary. thanks,

2008 May 15 12:38 PM

[User 194037:]

I just want to thank you for your analysis and enjoy the light humor in your comments.

2008 May 15 12:48 PM

[silvertree82:]

You nailed it on the government cpi figures. They reworked their inflation gauge many years ago to reduce annual cola increases. Inflation has been tame ever since (using Uncle Sam's version).

2008 May 15 06:28 PM

[David Fry:]

Let's see, I'd put up Turkey and so forth but there's not enough data to make it worthwhile from a technical perspective. While I could post "index" graphs StockCharts [which I use for the blog] doesn't have many of these indexes.

SLX is just in a default mode. I could do what you suggest I suppose but am happy with this.

Thanks everyone for your kind comments.

2008 May 20 06:28 PM