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Tuesday Outlook: Commodities, Emerging Markets

by: David Fry September 23, 2008 | about stocks: DBA / DBB / DBC / DGP / EEM / EFA / EWA / EWC / EWJ / EWZ / FXI / GLD / IFN / MOO / RSX / SLX / USO / XLE    
David Fry

David Fry

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<< Return to page 1 - Helter Skelter




















































When markets are this volatile there’s nothing wrong with maintaining heavy cash balances until things settle. After all, none of you out there is running a large mutual fund where you’re paid to be “fully invested” at all times.

Big Brother continues to issue edicts and restrictions on shorting certain shares. If you’re a good blackjack player and winning in the casino, they may kick you out. So it is for folks shorting. Change the rules of the game to protect your pals seems the order of the day. That’s the reason we’re seeing the spike in gold, oil, currencies and commodities in general. Traders are flipping-off authorities.

The week is young and who knows what will happen next. The politicians will want to score points while the average investor and man on the street is flummoxed.

Have a pleasant evening.

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

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This article has 10 comments:

  •  
    Sep 23 06:38 AM
    We're doomed!
    Reply
  •  
    Sep 23 08:23 AM
    I day traded some EEV on Thursday. Yesterday my broker (Vanguard) called and said the purchase during the hectic morning was "busted" and the SEC had voided my trade. Anyone else run into this?
    Reply
  •  
    Sep 23 09:07 AM
    "The politicians will want to score points while the average investor and man on the street is flummoxed. "
    Yes, how do individual investors decide on an appropriate course of action in a market that is mostly moved now by unpredictable government intervention instead of economic and market fundamentals?
    Reply
  •  
    Sep 23 10:00 AM
    As a novice chart watcher as the monthly chart of the SPY was posted does it not look like a "flag" in a long uptrend?
    Reply
  •  
    Sep 23 12:35 PM
    Finally, someone else who realizes the true underpinnings of yesterdays energy move and not just coming up with some generic weak dollar crap. People who have to be "in" something just got flushed "out" of their shorts and they need somewhere else to hide. Sold my coal to them yesterday, thank you professional money. So when you pay more for gas thank your legislators who waited forever until the shorts made their money anyway to enact this rule. Thank you author for stepping out on a limb to call it.
    Reply
  •  
    Sep 23 01:13 PM
    I've never had a Vanguard order fail to execute. What do you suppose happened?
    Reply
  •  
    Sep 23 01:45 PM
    Seeking Advice: "Yes, how do individual investors decide on an appropriate course of action in a market that is mostly moved now by unpredictable government intervention instead of economic and market fundamentals?"

    Although Mr. Fry's post is as good today as it always is, what he is charting is not a properly functioning market but a piece of performance art. Unless you're very risk-tolerant, highly adept at getting in and out quickly or just plain lucky, there's a lot to be said for cash.
    Reply
  •  
    Sep 23 01:48 PM
    Jim Bunning got it right:

    Paulson, you were CEO of Goldman Sachs from 1999 to 2006 yet you did not know the problems that were created by the CDO and securitization of dumb subprime mortgages and the lack of oversight!

    His comany was a leader in changing the law in 1999 during Clinton's term that allowed all this crap to happen! How can he claim such ignorance? Are we dumb enough to buy that line?

    The lowest quality mortgages were still being written all through Paulson's term.

    They have not talked at all about commercial mortgages. They will be marked to market, a cut of 25% or more in lost value. Talk about a huge loss. General Growth Properties REIT fell 25% yesterday because of inability to re-finance it's debt. I hear that McDonald's was denied new financing by Bank of America because of a shortage of capital!

    There are many properties that are mortgaged for $1 billion or more! Just think,

    700 properties at $1billion each would consume all the money Paulson is seeking!

    And now he would include credit cards and student loans!

    What in the world does he mean by transparency and oversight? Wait till he spends all $700 Billion taking care of his wall street friends before he informs congress of his strategy?

    Oversight should allow review and reports on a weekly basis to Congress, and with the opportunity for congress to disagree with his assessment of what to do. So far, I see no way for Congress to ever take a look at how he is doing!

    Looks like we are heading to caves, automatic weapons and canned food for survival! God help us!
    Reply
  •  
    Sep 23 09:16 PM
    automatic weapons, wow, you really are a bear. At least if it gets that bad the last thing you'll have to worry about is money. We'll be back to trading shiny metal and hooch.
    Reply
  •  
    Sep 25 10:52 AM
    RGR, you bought PVX at 8.93...great buy.

    The ex date is the best time to put in an under market bid on the CanRoys, the div. players get out to get in on the next div. which is sometimes the next day.

    Rugar
    Reply
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