This morning we have new highs in the juggernaut that is the metal indexes. Gold at 1,153.40 and Silver at 18.8550… Enough to make Yukon Cornelius from Rudolf The Red Nosed Reindeer start singing that song, “Silver and Gold, Silver and Gold”.
I think we will see the indexes continue to drift higher, not necessarily sky rocket higher, more of this drift higher. Be ware of the downdrafts in the gold contract immediately in the face of new highs and the round numbers, ie 1,160, 1,175, etc.
I also imagine there will be some sell pressure when Silver pops up to 19 bucks the first time.
In the stock indexes, we have had some volatility, with CPI coming out higher than expected, and with more bearish news in the US housing market with new home starts at a new 6-month low. It doesn’t take a rocket science to know we don’t need new construction when we already have a limitless supply of existing homes that are not selling. And a final bit of bearishness, applications for mortgages fell in spite of rates falling. Seems the US consumer is finally at odds with its love affair of home ownership, for now it seems.
In SPZ, we still have the high from 2 days ago as resistance up at 1,112.25. The Dow futures DJZ posted a new high during the overnight session at 10,427 but hasn’t touched that level during the day session.
In the grains, we have challenged the 1050 level in SF, while Corn and Wheat have been less volatile, yet trading in sync with the gyrations in the beans.
Fund Money infusions will keep this market bullish, as the money flow suggests more bets coming in that US grains are under priced relative to the US Dollar, Gold, and Crude Oil.
Finally, Crude has had a bump up to the 80.33 level. There is still a lot of resistance to go at 81 and 82…Suffice it to say, however, that my local gas station owner has already run out to raise the 87 octane regular from 266 to 286 most likely…
Good Trading,
For the Day, I would look for a pullback from these highs as a chance to get long.