Gerry Sullivan

Thursday Outlook: Commodities, Global Markets

f... was typed as: foreign. Does Seeking Alpha consider that a dirty word?

Thursday Outlook: Commodities, Global Markets

The biggest anomaly in this stock/gold/commodity/f... currency rally is that US Treasury interest rates have stayed so low. The 2, 3, 5, 7, 10, and 30 year Treasury securities are all trading at premiums to their most recent auctions.

With high and rising unemployment the Fed can create money, boost asset prices, and still keep rates down at historic low levels. In spite of what they say, this is clearly what they want to do.

The Treasury and the Fed know that only inflation will solve our
most immediate economic problem: the sluggish economy and resultant high unemployment. Inflation will eventually boost real estate prices which will help save the banks.

Stocks and commodities are going along for the ride.

Thursday Outlook: Commodities, Global Markets

Much of "the crowd" (myself included) thought the market was
undervalued when the Dow Jones Industrials broke below 10,000
on the way down 12 months ago. That was Oct 6, 2008.

Now "the crowd" (at least the majority on Seeking Alpha) thinks the market is overvalued at the same level.

I see the pre-market looks lower today and tomorrow is the last day for trading Oct options, so a pause here makes sense. But, ask yourself what you thought in early Oct 2008.

Which market was more favorable for going long, Dow 10,000 in early Oct 2008 or Dow 10,000 yesterday?

Wednesday Outlook: Commodities, Global Markets

The move to ban leveraged ETFs by full service brokerage firms is a bit like a Kosher restaurant taking lobster off the menu. They
weren't selling much of it anyway.

Most full service brokerage clients also have an online account and would do the leveraged ETF trades online where the commissions are much less.

Friday Outlook: Commodities, Global Markets

The real support on the SPY was around 89 which can be clearly seen on a 50 day daily chart. When SPY hit that on Wednesday and the market was short term oversold, the rally followed.

You can see a possible "head and shoulders" forming on the same 50 day chart.

Tuesday Outlook: Commodities, Emerging Markets

If you want to think about what could make the nightmare worse, watch the relationship between the ETFs and their net asset value. For instance if you start to see the SPY trade consistantly below its NAV (SXV), you will know disaster is coming.

I sold all my SPY, MDY and QQQQ yesterday and replaced them with an equal dollar amount to approximate the same S&P industry weightings.

Sounds crazy? My brokers are telling me that customers are afraid of
FDIC insured bank deposit sweeps and are buying Treasury Bills at a much lower yield.

Sovereign Wealth Funds - Energy Futures Speculators?

Here we are 35 years after the 1973 Arab Oil Embargo.

No energy strategy, importing more oil than ever before, driving gas guzzlers at the raised 75 mph speed limit, drinking French Alps water from a disposable plastic bottle, in a country that has trashed its currency.

Let's blame the speculators.

Friday Outlook: Commodities, Emerging Markets

Lehman should be allowed to fail, I totally agree. I would guess that the Fed has Warren Buffett lined up to take out LEH some weekend for $2, the Fed's favorite number.

You can rest assured that Warren's lawyers will be more careful about the details than JPM's. Remember how the errors in the Bear Stearns weekend $2 deal enabled management to push the deal up to $10.

Thursday Outlook: Commodities, Emerging Markets

Head and shoulders top on GLD at 100?
Same as gold at 1000. Big, big round number!

Remember the Dow Jones Industrials at 1000:
1966, 1968, 1972...6 years to finally get through
the 1000 number (for a couple of months).