Currently, Gold and Silver have made new all time highs.. Gold at 1143.40 and Silver at 18.45…From this action you have to start considering 20 dollar an oz Silver and 1,250 $/oz Gold.
Ironically, this occurs on the day when President Obama lands in China. There had been rumors of agreements, or pressure to have China let the Yuan float against all the world’s currencies…Perhaps this is the market’s way of anticipating the 2percent chance that something concrete will come out of this visit other than photo ops and discussions as to whether or not the President of the United States has to bow to anyone on the planet, (Other than of course, his wife..:-) ) In any event, the US Dollar is once again under pressure, and for the time being, every local newscaster is turning into a forex trading expert.
I still have to think at some point this is going to turn out differently than the herd expects. For the time being, though, commodities are being purchased as a hedge against currency fluctuations… Period. The whys and hows and deciding whether or not its a “good” thing or not shouldn’t be our concern. Just try to make some dough off of the move, and you will be farther ahead than the rest of the crowd.
In the grains today, we had impressive buying in the wheat, as it finished up 23 cents at 564, Can anyone say “index fund buying”? First it was the corn, then last week the beans, and low an behold, its the wheat today and possibly for a few more days in this buying cycle.
CZ (dec corn) finished above the psychologically important number of 4.00 at 401 3/4. And after a wild ride, which saw SF (jan beans) post a day session low at 993 only to rally back up to high almost at 1012…a 20 cent Hi-How-Are-Ya afternoon wedgie for the traders who happened to be short on perceived afternoon weakness,… For the day SF settled up 20 cents at 1007 3/4…
I have to mention that long-term bear trend line which had an intersection point today at 1015 1/4.. We posted a high within 3 1/2 cents of that trend line today, but were not quite able to pierce it.. Perhaps tomorrow?
For now these grains are looking kind of like they have come a little too far, a little too fast, but they are being dragged higher, as it were by the speculative movement of world wide capital in to physical commodities.
Finally, the Stock indexes as well as crude oil have rallied as well today. SPZ posted a high (so far for the day) at 1,112.00 and DJZ is flirting, still with the 10,400 level. at the time I am writing this, we have been looking at the screen with a large 800 lot order resting on the sell side at 10,404.. Usually, such a large order is a magnet. As of this writing, however, we haven’t been able to go up and trade there.
Actually, I just looked back at the screen, and we did trade up to the 404 level, around 150 stuff of the 800 traded there, and then we had a prompt 30 point smack lower for all of the traders who were trying to get long anticipating a move through that large order. My guess is that over the next hour, we may revisit that level, again because large orders, for better or worse, attract trade to that level.
I would look for some fireworks, perhaps, some continued buying on momentum, once the bonds close at 2PM CST. In any event, the last hour of trade should be interesting in the stock indexes
Good Trading