This isn’t the big USDA report to be worried about in my opinion.
That is on the horizon for Friday Jan 10th, when we get final production and world wide production for grain for 2013 as well as updates on acres and projected crops for S.A.
As far as S.A goes, weather has so far been non-threatening, with nothing out there so far hurting production. That could change in 5 to 7 days, so I wouldn’t put that bull story to bed yet. Lord knows the bulls won’t.
Today, CH has a ton of resistance at $4.50. SF at 13.50 with support at 13.00. I continue to eye the wheat/corn spread for a spot to get long again. WZ/CZ went from 2.13 out to 2.40 and has come back below 2.10 again. We caught that for a nice 15 to 20 cent winner 3 weeks ago if you’ve been following along with me.
Looking at WH/CH there’s some support at 2.06 and then 2.01. I would look at that as an area to bull spread once again. One Caveat: As I write this Wheat has fallen to a new contract low. So I wouldn’t be in too big a hurry to load up on this spread. I’d just be looking for an area to put that on trading the difference between corn and wheat.
As for the Stock Indexes, I don’t see any profit in trying to pick a top here. My guess is we’ll grind higher through end of year. A WSJ report chronicled the fact that net worth of the country is “recovered ” from the 2007-2009 crack back… Of course, the top 10 percent benefited the most. I’m sure that will be grist for the mill for the class warfare theme out of Washington. Perhaps we need a Czar of equality? I just don’t know how that stacks up in what’s supposed to be a free society/with a free economy? I guess time will tell, but that should be a continuing theme as we have day after day of “new record highs” in the S&P and Dow.
Nasdaq is at 4,000. It still has another 1K pts to go to hit its 2000 high. That suggests to me we still have a ways to go riding this bull. The wall of worry remains out there. Each new high is met with a proclamation from someone preaching new gloom and doom. That can only mean we still have more to go?
For me personally, I think we get a triple from the 2009 low. That low in the Dow was 6500 and the low in the S&;P was 666. A triple gets us Dow 19,500 and the S&P 1998. Lets just call it S&;P 2000.
A triple makes sense. It might be the exact type of bounce to have the perma bears throw in the towel and buy stocks. Again, I don’t have crystal ball, but I just like the whole “triple” idea from a psychological standpoint.
Below is a chart of the Dow: After 2009 a lot of people spent a lot of energy, emotion and bluster explaining why the stock market was not the place to be. The Chart tells a different story. Will we have more horrendous corrections to scare the herd? Absolutely. But over time, the Dow gives you a 7% return. The only problem is, periodically, you have “corrections’ and panics that scare the herd into selling at exactly the worse time.
Ditto when we get to new highs. The “Happy Day’s Are Here Again” crowd has not taken center stage yet. Which is the one reason I think we have a ways to go to the upside yet.
CER
