Friday Outlook: Commodities, Emerging Markets

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Here’s some typical WS humor circulating trading desks these days:

TARP-$700 billion bailout--Taxpayers Are Really Pissed.

CEO -- Chief Embezzlement Officer.

CFO -- Corporate Fraud Officer.

BULL MARKET -- A random market movement causing an investor to mistake himself for a financial genius.

BEAR MARKET -- A 6 to 18 month period when the kids get no allowance, the wife gets no jewelry, and the husband gets no sex.

VALUE INVESTING -- The art of buying low and selling lower.

P/E RATIO -- The percentage of investors wetting their pants as the market keeps crashing.

BROKER -- What my broker has made me.

STANDARD & POOR -- Your life in a nutshell.

STOCK ANALYST -- Idiot who just downgraded your stock.

STOCK SPLIT -- When your ex-wife and her lawyer split your assets equally between themselves.

FINANCIAL PLANNER -- A guy whose phone has been disconnected.

MARKET CORRECTION -- The day after you buy stocks.

CASH FLOW -- The movement your money makes as it disappears down the toilet.

YAHOO -- What you yell after selling it to some poor sucker for $240 per share.

WINDOWS -- What you jump out of when you're the sucker who bought Yahoo @ $240 per share.

INSTITUTIONAL INVESTOR -- Past year investor who's now locked up in a nuthouse.

PROFIT -- An archaic word no longer in use.

You may also be blindsided, steamrolled and shocked by some proposals to tax or eliminate preferences on 401Ks for higher income taxpayers. This would be a big negative for markets, investors and the incentive to save. See the article here which includes obligatory nanny state and class-warfare thinking.

We need to keep our sense of humor even amid the carnage. Hopefully the readers of this blog and my newsletter have been made safer by it and can laugh along. If you’re in too much pain to laugh, I understand.

Here’s the bright side. The markets are as oversold as they can get. We may get a sizable bounce at any moment. That could either provide an escape hatch for people still wanting to sell, or one heckuva buying opportunity.

Technical analysis at these levels is not as helpful as one would like as markets are blowing through support levels quicker than we can identify them. All we can do is try to help you identify a range of “possibilities” and that’s about it.

Have a pleasant weekend.

Disclaimer: Among other issues the ETF Digest maintains long or short positions in: SDS, QID, SIJ, SMN, SRS, SCC, XLY, IYR, IEF, GLD, DGP, FXY, FXB, DBC and DEE.

Comments

[unfaire:]

In an up-market, mark-to-market spirals up the market. But, in a down market, when combined with margin calls, it becomes a death spiral. All collateralized debt instruments will be devalued, called, devalued, called … till it is worthless and bellied up. Regardless of how we got into the mess we are in now, it is this twins that will do us in. If we do not repeal mark-to-market immediately, we ain’t seen anything yet. Where are we now in Dante’s Inferno?

2008 Oct 10 06:23 AM

[SA Guest:]

"The markets are as oversold as they can get" - Most crashes are preceded by oversold conditions. But when we get the reversal today or Monday it will be the trading opportunity of a lifetime (unless it's different this time)

2008 Oct 10 06:43 AM

[Pretzel Logic:]

"Technical analysis at these levels is not as helpful as one would like as markets are blowing through support levels quicker than we can identify them."

Lee Adler, who runs Captialstool.com, has a saying: "There's no such thing as support in a bear market."

2008 Oct 10 06:44 AM

[blackbody:]

this is getting ridiculous, and I thought I was a perma-bear. I'm going to buy something today.

2008 Oct 10 07:46 AM

[LT777:]

Those are some great charts (and comments)!

My brain hurts right now, but those are some great charts!

2008 Oct 10 08:04 AM

[Sidj:]

I remember in 1987 the week before 'Black Monday' was the worst in history. It made the cover of Time. But then 'Black Monday' hit and everyone forgot about the previous week. Just because we've had a big selloff doesn't mean we won't get another 'Black Monday' with all the average joes bailing out at the same time.

2008 Oct 10 09:17 AM

[jjc7477:]

I can only say thanks Dave for the definitions. For the first time in over a week I actually laughed until I cried. Actually, I've been crying all week!!

John

2008 Oct 10 09:21 AM

[fatcat:]

Those gaps are very scary...

2008 Oct 10 09:27 AM

[svkoho:]

Thanks David for being there with wit and irony.

2008 Oct 10 10:32 AM

[Fu Dog:]

User 143705 dot dot dot. I see you're out of the institution now and back trashing the Seeking Alpha sites again.

User 143705
Sep 10 01:00 PM
value what u have to say....but say it plainly...hate ur vagueness

User 143705
Sep 16 09:21 AM
cut the crap....bullet riddled..not proff....talk plain to us ....cant make out what ur call is

User 143705
Sep 16 09:21 AM
cut the crap....bullet riddled..not proff....talk plain to us ....cant make out what ur call is
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 Oct 10 11:14 AM

[shari greer:]

Still having a sense of humor is quite telling!!
However, your charts unfortunatley remind me of my
husbands recent two week stay in the hospital following
open heart surgery.... wasn't pretty... but he
has survived the experience... hope the nation will to...
(From my lips to God's ears!!)

2008 Oct 10 11:47 AM

[dc1:]

Hi David,

Thanks for the WS humor. We all need that around now. It is definitely something to save for later pick me ups.

PS Love the charts. Thanks again for the effort.

2008 Oct 10 11:50 AM

[davemcc3300:]

David, I'm another fan that uses your work to distill what has happened. I hunger for some of your recommendations tho. You're old enough and sharp enough to have gut feelings worth airing.

But if you don't tell us how/where to focus our investments in the future, I'll still love you and study your wonderful charts.

Another Dave

2008 Oct 10 02:56 PM

[Valparaiso:]

Unbelievable charts, Dave. And I appreciated seeing the INDU chart from that perspective.

To Another Dave: uh, did you ever ponder to think that one has to SUBSCRIBE to his newsletter if you want his recommendations? Knock, knock.

2008 Oct 10 04:18 PM