Dave's Daily: Commodities on Center Stage - TheStreet

Dave's Daily

By Dave Fry, founder and publisher of ETF Digest .

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COMMODITIES ON CENTER STAGE

Energy inventory data was bearish overall as supplies rose on the week; but, the momentum is with bulls and prices ended the day higher.  Base metals led by copper and so forth also are on a tear higher.  Even agricultural commodities joined the bulls as weather concerns peril orange juice and other crops. 

It's no coincidence then that bond yields would rise given the historical inverse relationship between basic commodity indexes and bond yields with a lag of a few months.  But, we've never seen this much supply of new Treasury bond issues so the lag may have already disappeared.  And, if the Fed should stop buying for their account what the Treasury is selling the recovery will stall.  Hell, some even suggest the Fed would like to see the stock market correct so interest rates don't rise too much.  Based on the release of Fed meeting minutes today there is disagreement among board members about removing stimulus.

Economic data today was positive overall as job cuts were less than anticipated (but, they're still cutting) while ISM Services data was better than expected.

The stock market is basically biding its time waiting for employment data tomorrow and Friday.  Volume is still light while breadth was again flat overall.

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Continue to Major U.S. Markets

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Continue to Major U.S. Market Sectors

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Continue to Currency and Commodity Markets

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Continue to Overseas Markets

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Continue to Concluding Remarks

That does it for today.  It seems stocks are pausing before Friday's employment report.  The same can't be said for commodities which are on fire for the most part.  In many ways these conditions are disturbing and encouraging.  Negatively I have a feeling in bones "something's up" as the dollar is overbought based on Commitment of Traders and a shortage of UUP also has existed.  What would cause a sudden flight to the dollar?  Trouble.  The same could be said for gold and other commodities.  If such is the case, some big players know something us commoners don't.

Believing in government data is becoming harder and transparency is at its lowest level in memory.  Keeping things more honest is the internet and the blogosphere thankfully as the latter can dissect and reveal BS instantly.

Tomorrow we get more news on the employment situation with Jobless Claims and Monster Employment Index. 

Let's see what happens and you can follow our pithy comments on

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Disclaimer:  Among other issues the ETF Digest maintains positions in: SPY, VTI, IYR, XLY, XLU, DBC, GLD, XME and HAO.

The charts and comments are only the author's view of market activity and aren't recommendations to buy or sell any security.  Market sectors and related ETFs are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period.  Chart annotations aren't predictive of any future market action rather they only demonstrate the author's opinion as to a range of possibilities going forward. More detailed information, including actionable alerts, are available to subscribers at

www.etfdigest.com

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Dave Fry is founder and publisher of

ETF Digest

, Dave's Daily blog and the best-selling book author of "Create Your Own ETF Hedge Fund, A DIY Strategy for Private Wealth Management," published by Wiley Finance in 2008. A detailed bio is here:

Dave Fry.