Thursday Outlook: Commodities, Emerging Markets

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There will be no posting tomorrow given the webcast with ProShares being done for financial professionals at about the time I normally start writing. So, unless everything falls apart or zooms higher spectacularly, I’ll be having a beer and relaxing at post time.

Investors are frozen not knowing whether to buy, sell or cry. Rather than generating confidence and trust, the government is creating confusion and concern. These silly short-bans are becoming amateurish and not making sense.

Many bulls “hope” that some rescue package deal will be reached and approved. They believe we’ll have a big rally as a result. But it may be just another of those knee-jerk rallies that last one or two days only to fail once again. Nevertheless, the more oversold we become, and we’re getting there, the sharper the countertrend rally.

The financial crisis needs more disclosure and light shined on it. Until then, we don’t know what we’re up against.

Thanks to everyone for their emails and comments.

Have a pleasant day.

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

Comments

[MKW:]

Certainly a relief rally once the bailout passes; but these are getting shorter and shorter. After a year of watching absolutely gonzo rocket blasts up in the market any time the piddliest little piece of We-Can-Maybe-Spin-It-A... news (Dow up 150, 200 intraday because McDonalds raised its dividend, anyone?) it's actually kind of a relief to see some actual skepticism burrowing its way into the market. It gives me hope the market can get back to health, eventually.

2008 Sep 25 07:22 AM

[Seeking Advice:]

There probably will be a rally after something passes, but not necessarily because anyone really thinks it's overall a good idea, but probably just relief that this confusing proposal has been dealt with one way or another. (Treasury admits they made up the $700B out of thin air?). But as has been stated, the lack of transparency about just what the economy is up against and the poor track record of the Federal Government in perceiving the problems and acting effectively is probably going to weigh on the markets. And there is no free lunch. $700B or $1 Trillion, whatever the number ultimately turns out to be, is a whole lot of money and that has to paid for. It will have an effect on the economy and the nation for some time to come. And who exactly is going to provide those dollars we don't currently have?

2008 Sep 25 07:57 AM

[parnelli96:]

Dave will be featured on a webcast today with ProShares if anyone is interested.

2008 Sep 25 10:20 AM

[pchris:]

Here's a better link to that ProShareswebcast.

https://profunds.webex...

2008 Sep 25 11:47 AM

[pchris:]

https://profunds.webex...

2008 Sep 25 11:47 AM

[pchris:]

sorry, guess SA won't allow the link to be shown.

2008 Sep 25 11:49 AM

[OldLimey:]

Can't believe Gordon Brown's going to Washington tomorrow in order to perform last rites on the world financial system. More likely a Rose Garden photo op. Something will be cobbled together for sure, and equally certain is a perfectly choreographed rally. But while the media fixates on equities, the real story will be playing out in the interbank 'market'; that's where to look for an answer to whether Paulson's silver bullet really glistens or is just another blank. Personally......I've no idea at all.

2008 Sep 25 01:56 PM

[phdinsuntan...:]

short-bans pretty smart, a one month ban will make financial prices explode up just in election time as these poor guys close their positions like lemmings, de-deciders will claim the laurels...

2008 Sep 25 02:33 PM