Dec Gold could drop back down to 1695 and still be a good buy. Believe it or not, there’s 80 bucks of air under this contract. We are lounging between 1800 and 1750, content to have those round number targets contain us. World wide events, be it 1) Europe or 2) Mid East Tensions will be the catalyst for the next move.
I remain friendly gold, based on the up move 11 trading sessions ago when we moved above 1736 on November 3.
Grains? Dec 11 Corn moved back to the middle of its one month 30 cent trading range. Ugh 🙁 Dec Wheat moves to the bottom 1/3 of its 40 cent trading range and looks poised to test 6.00 again. Jan beans are also at the bottom of its dollar range, and look poised to make a run back down to 1163 to test that one year low one more time, which would make it the 5th time in 6 weeks.
I wrote last time that I thought Dow had run into resistance. Today we are down 194 at 11,844. Three times in the past month we ran into a wall in Dec Dow futures at 12,200. That was 150 points ago. We are trading at 11,845 currently (3:13PM CST) as I write this). Technically we don’t have good support until 11,669 and then 11,600. Again, we are chopping around in a sideways range. We seem to be waiting for the other shoe to drop from Europe.
Also, I think the BK of Mann has had a very negative impact on trading in general. Some days the action looks like it is being driven only by margin clerks. Rational thought having dropped out the window. Mann was the 8th largest commodities clearing firm. 20% of the market liquidity went through their computers and clearing house. Having that level of dough out of the market has a negative impact on trade direction.
No matter what the CME does or the bankruptcy attorney does, this is a black eye for the whole industry. I think down the line you will see the legal wall put back up where retail and investment banking will go back to having a Chinese wall between them. Its apparently too tempting, even for the best and brightest, to co-mingle funds on an as needed basis. Its ok when the bet rolls over and everyone is whole. Mann this time showed us what happens when a large ego doubles down on a loser. The ensuing debacle is an order of magnitude greater than any one would have guessed.
Every day the seg funds are not restored is a black eye on the business.
We need this to be fixed. ASAP
That is all for tonight.
CER