What’s it take to be a member of the “in crowd”? The membership list is being both reduced [Countrywide and Bear Stearns] and expanded [FRE and FNM have been given temporary membership…sort of like pledging]. Anyway, they get to borrow money from you and me with ultra low interest rates of around 2%. They can exchange crappy mortgage securities as collateral for longer term loans. Who wouldn’t want to trade for free with someone else picking up just the losers? Pretty cool, eh? Wanna join?

Like a lot of clubs you must know someone to get nominated for membership. Good luck with that.

Just remember, when these firms report earnings next check out the sector where they have any profits. Since underwriting and M & A are quiet be sure to note “trading” profits. That’s where your 2% money gets put to work. They’ve been busy this week in that regard.

Well enough of that. The August “three-peat” I’ve been talking about seems a possibility even though it’s only the 6th of the month. Commodity prices continue to fall and bulls [trading desks and hedge funds] are scooping up financials and most anything else unrelated to those now out of favor sectors. It wasn’t a spectacular day but impressive for a follow-up to yesterday’s big move.

Yahoo/Finance seems mathematically challenged. They haven’t been able to add columns correctly and now it seems they can’t add-up proxy votes well. We have some dedicated folks, one in particular, giving them the math solutions to financial data anyway. But, it seems they’re moving at a resolution at a bureaucratic pace. Anyway, here’s there data followed by WSJ.

The NASDAQ in particular has been sensitive to oil price movements. As soon as oil prices fell after the inventory report it exploded higher.

Now that the taxpayers own half of Wall Street plus FRE and FNM we’ll have to pay for it. The treasury auctioned off the largest sale of 10-year bonds today. Of course with supply comes some repricing.

Uncle Buck is poised to breakout of that protracted box given declining oil and commodity prices, rising yields in the US and just because that box is boring. Two products you can use are UUP [PS/DB Bullish Dollar Index] and DRR [VanEck Down Euro Leveraged ETN].

To repeat, Da Boyz club is closed to you and me. They play from the big stack of chips courtesy of their primary dealer status. Despite the crummy news when you have this many chips you can push things any way you want. Stay away. There’s nothing wrong sometimes with being a spectator which is why we’re nearly 90% in cash.

It’s only Wednesday and we still have two days left in the week; but, bulls definitely are in charge as long as commodity prices, led by oil, keep falling. The rest of the news is terrible but ignored for now. Da Boyz play today and we pay later.

Have a pleasant evening.

Disclaimer: Among other issues the ETF Digest is long or short: XLV, RXL, IBB, IEF, PST, TLT, TBT, DBC, DEE, USO, and RSX.

Last 5 posts by David Fry

• MARKET COMMENT October 22, 2009 DRIVE-THRU SOUP KITCHEN 2009 So, what the hell was yesterday about anyway? - October 22nd, 2009
• MARKET COMMENT October 20, 2009 TAKING A BREAK It was a pretty strange day. - October 20th, 2009
• MARKET COMMENT October 13, 2009 EARNINGS WORRY WARTS I just have a spooky feeling but then I always do. - October 13th, 2009
• MARKET COMMENT October 8, 2009 GETTING SOME ALTITUDE SICKNESS YET? - October 8th, 2009
• MARKET COMMENT October 2, 2009 REALITY BITES BULLS Economic reality is meeting bullish enthusiasm and the results are disappointing and upsetting. - October 2nd, 2009