Tuesday Outlook: Commodities, Emerging Markets

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It’s only Tuesday morning. From a historical perspective yesterday was a big down day, but not a crash in percentage terms. To do that, the market would need to drop a few thousand points on the DJIA. Unless something dramatic happens to reverse the situation this week we’re probably just in a bear market where prices will continue a broad decline.

Today is Fed day…again. So many bulls hope the Fed will cut rates. I hope they don’t since they’d be wasting their fire power. Furthermore, interest rates are not too low. Money and credit conditions are tight and would remain so if they cut rates to zero. But, no doubt, it would be a psychological boost even if a short-term one. Doing so would hurt the dollar and rally gold. It might even hurt bonds.

There is more data to come all week and then we end with quad witching which is going to be an extra special event given the volatility. Let’s see what happens.

Have a pleasant day.

Disclaimer: Among other issues the ETF Digest maintains long or short positions in SDS, QID, SMN, SIJ, UGE, SDP, IEF, TLT, EFA, EFU, EEM, EEV and FXI.

Comments

[silverwink:]

Wow, big opening commentary, you sound as p#*sed off as we all feel. Does anybody really believe these markets anymore, or is it one big spin job?

2008 Sep 16 09:03 AM

[User 143705:]

cut the crap....bullet riddled..not proff....talk plain to us ....cant make out what ur call is

2008 Sep 16 09:21 AM

[notsosmart:]

LOL.graphs, charts,figures,maps.i have said for years that wall st is vegas.you lose slwer but nobody brings you a drink.i think the world has learned this lesson now.as the tide was rising all boats nobody cared what the greedy crooks,lying ceo's, self serving bod's were doing.i got out @ 14,000dj not cause im smart. i got scared. is my bank safe? i dont know.how sad what these people have done to yhis once great country.

2008 Sep 16 09:30 AM

[pchris:]

Hey user 143705: You're on the wrong blog site. Follow your own heed--cut the crap.

2008 Sep 16 09:34 AM

[Learning:]

What is "quad witching"

2008 Sep 16 10:08 AM

[pchris:]

Learning: www.investopedia.com/t...

2008 Sep 16 10:26 AM

[Jason Rines...:]

Thanks for showing class Rugby Man. Ladies and gentlemen, if you want America to all pitch in and fix this, then be prepared to throw a link or brief response to uneducated folks coming here looking for answers. Are we leadership here or not? And to you posters here, this is an investment website. Some of the brightest individuals on earth are here to help. But you must show some class and limit understandable frustrations into coherent questions. Google is also out there for general economic and financial terms.

2008 Sep 16 10:30 AM

[a. palmer jr.:]

Are we still sure we want to put Social Security in the stock market??

2008 Sep 16 11:22 AM

[dc1:]

To iThinkBig,

Thanks for posting your comment. Ditto for me. David and many of the post writers go to a lot of time and trouble to add FINANCIAL info. Lots to learn and consider. We don't need the negative crap...and that's putting it mildly.

2008 Sep 16 11:45 AM

[Internet2k4:]

Interested in DF unloading doubleshort crude oil - I took today's gap down to do the same, as well as taking some quick gains on SDS and SKF, factoring a risk of some sort of relief rally or consolidation on FOMC action this afternoon. As a Canada booster, I'd say Russia has taken itself out of the optimistic "emerging market" category - how about more short ETFs for "submerging markets" as economies blessed with resources that are nevertheless drinking themselves to infertility and death under the direction of crooked autocrats.

2008 Sep 16 12:39 PM

[Lynn:]

Mr. Fry,

Since you brought it up, how about adding EWA and EWC.

2008 Sep 16 06:09 PM

[pitaking:]

David, I love the fact you don't force opinions on your readers unlike alot of other writers and talking heads, how about the FXP for a future chart?

2008 Sep 16 10:58 PM