Today has seen some volatile trade in the Crude, as well as in the Dollar Index. Over night, we saw the grains make a run with almost a 30 cent break from 99 to 71, failing to fill the gap in SX down at 68… Looking at the charts, that looked like a downward spike in thin overnight trade…
There is currently some talk about rain delaying the farmers from getting the beans out of the fields…Also the trade is anticipating the Index Funds will be selling wheat and corn in response to CFTC position limits… Perhaps they will be buying beans as they sell balance their positions…
For the rest of the day, SX looks like it will be range bound between 975 and 985 in choppy lousy trade, CZ looks like it will be in the 372 to 75 area, and WZ looks to be in digestive trade bouncing around the 500 mark…It certainly looks like farmers stepped in and sold CZ at the key 400 level, and SX at the 1000 level..Marketing opportunities, which will now most likely be the resistance caps in these levels which we will trade up to and around..
There are also various gaps below current levels which the pros may try to take a run at,flushing out the weak speculative longs who came in too late and near yesterday’s highs…
For the time being, it looks like the metals are in a consolidation/breathing mode…both Silver and Gold look vulnerable to some short term profit taking, with Silver fighting around the 18 dollar level and Gold hemmed in by the 10067-70 level.
The Stock indexes are at a key crossroads, for better or worse, with SPZ flirting with the 1100 level and the Dow dancing around the 10000 level…
I continue to think that these indexes are vulnerable to a correction, but that’s not to say there isn’t a blow off top coming which could see the Dow pop up to 10300 level punishing speculative shorts who are leaning on that 10,000 level…
Good Trading