Holding true to a very long-term pattern, today was Tuesday and after a large up move yesterday, we saw a slight turn around…Checking historical charts, on a daily basis, I am sure one could write a program to take advantage of this market trait..
In any event, we saw the market do a quick reversal, spurred mostly on by a bounce in the dollar…A correction in a slide which has seen the dollar drop more than 7 percent in value over the past 9 months. Perhaps the musings last week of Paul Volker, former head of fed in the 80’s, where he argued that rates would have to raise to defend the dollar, have planted the seeds for future tightening of by the Fed.
Interestingly enough, his comments came on the heels of the rumored ‘secret’ meetings between OPEC countries and America’s three best buddies, Russia, China and France, about a ten year plan to phase out the US dollar to settle petrol contracts..
For today, its looks as if the grain market took its cue from lower oil prices, and took a breather.. Oil is now barred above by the 80 dollar level… November beans look to be bound by the 1010 level, and the next few weeks will tell if those highs will hold, or will the trend re-ignite with fresh new highs as we head into the end of the month.
For the rest of the week, we will have to watch for any fresh news of lower yields, or more delays in the harvest due to wet weather.
The stock indexes look as if they too are taking a respite, digesting the recent move to the 10,000 level in the Dow, and the 1100 level in the SP500.