Thursday Outlook: Commodities, Emerging Markets

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The chart below contains weekly DeMark indicators. The last 9 [the smaller maroon numbers above the price bars] indicate potential trend exhaustion, meaning sideways movement for awhile as it did last fall, just a waypoint for another move higher or something worse. Sideways, up or down equals brilliance, eh?

click to enlarge

Enough poor tracking with leveraged issues will cause people to turn away from them. Obviously issuers are under no obligation to maintain what appears as proper levels so it’s a buyer beware deal. But, if tracking remains poor not many investors will deal in them so sponsors will have to take note.

Wednesday’s rally seemed a bust in the end despite the rally in tech. Markets were oversold and looking for “any” catalyst to move higher. The weak Fed statement following no action on interest rates seemed a pretty thin reed to rally upon. Have a good day.

[Lead photo courtesy of family friend Chris Spezzano: www.chrispezzano.com]

Disclaimer: Among other issues the ETF Digest maintains long or short positions in SDS, SIJ, IYR, SRS, TBT, DBA, DAG, DZZ, GLD, DRR, UUP, EFA, EFU, FXI, FXP, EEV, and EWV.

Comments

[fatcat:]

Thanks David,great stuff!

2008 Jun 26 05:44 AM

[steveballmer:]

There is money to be made out there people, you just have to be fast, smart and have a few million to spare!

2008 Jun 26 07:36 AM

[User 59050:]

i really really appreciate this article. it is so helpful. thank you very much for your time and effort.

2008 Jun 26 08:18 AM

[Muskoka99:]

I am new to this seeking alpha web site, and appreciate your daily charts. It gives me some clean insights into the market without the
"Boby Mcferrin" bandwagon parade.
Thanks again David.

2008 Jun 26 08:40 AM

[R. Richard ...:]

How about doing a report on the "quality of Tracking/"

Or have I missed it?

2008 Jun 26 08:45 AM

[dukeb:]

Yup, I bailed on several ETFs last year that just were not living up to their marketed target. (It's a real downer when you know what the price of an issue should have done during a sharp trend, but then login to find it's done nada or even worse...gone the "wrong" way.) If they were physical products, there would be forced recalls and class-actions!

2008 Jun 26 09:38 AM

[topax:]

Look forward to each of your timely posts, but can you please clarify today's comment on the EWZ (Brazil) graph? Thanks

2008 Jun 26 09:42 AM

[David Fry:]

I'm awaiting responses from ProShares and am sure one is forthcoming.

I'm short EWZ and know that's a dangerous trade given the current momentum and "got to own it" sentiment. I lost a word or two in the call-out it appears.

Thanks for your comments everyone.

2008 Jun 26 10:52 AM

[J. Fredrickson:]

Takes some You know Whats....Big Brace Balls... To Fade the EWZ, i.e. go against the trend.

www.investopedia.com/t...

2008 Jun 26 10:57 AM

[topax:]

OK, got it, thanks on the EWZ. Interesting your shorting it while others, as you said, need to have it.

2008 Jun 27 06:08 PM

[Hue101:]

May I ask, maybe "out of the area question as I am quite a bit new at this once again, but aren't the same person that writes for the site. and you're shorting this? guess I had better do better / more intensive than I have been attempting..



On Jun 26 10:52 AM David Fry wrote:

> I'm awaiting responses from ProShares and am sure one is forthcoming.
>
>
> I'm short EWZ and know that's a dangerous trade given the current
> momentum and "got to own it" sentiment. I lost a word or two in the
> call-out it appears.
>
> Thanks for your comments everyone.

2008 Jun 30 10:50 AM

[Hue101:]

OH no Sir, not required to request anything from them, as I tend to track some of your comments.. and fully appreciate same ..far more than you might be aware. I think sometimes being "new" at some things is never fun. and Dave that learning curve can be a real killer some times.
I think i was just shocked that .. this time I hadn't of followed someones basic rules in making this profitable. and just re-learned the word shorting...
but thanks for the considered reply



On Jun 30 10:50 AM Hue101 wrote:

> May I ask, maybe "out of the area question as I am quite a bit new
> at this once again, but aren't the same person that writes for the
> site. and you're shorting this? guess I had better do better / more
> intensive than I have been attempting..
>

2008 Jun 30 11:26 AM