Your flock found a dwelling in it; in Your goodness, O God, You provided for the needy.
Since the members of Christ's flock are subjected to much suffering for their faith's sake and are humbled and oppressed and despised by all, God manifests His loving-kindness toward them so that after much humiliation they taste and experience ever more how good, loving, and kind God is. Thus the many abasements and sufferings teach the simple believers to become ever better acquainted with God, to trust Him and believe in Him and thereby grow strong and rich and established in their confidence in God's kindness. This is what the psalmist means when he says: "In Thy goodness, O God, Thou wilt provide for the humbled." That is: "Through his humiliation and suffering, Thy goodness, O God, will find a way to him. He will now surrender his own goodness and no longer count it gain, solely intent upon collecting a treasure for himself in Thy goodness." This is nothing else than a growth in faith (Romans 5:3-4). To this the flock of Moses, the works-righteous, and the disciples of the Law will never attain; for it must be effected by faith and the free rain. Thus man prepares nothing but evil for himself. All the good accruing to him comes from God.
From Commentary on Psalm 68 (Luther's Works 13:11-12)