Today, Monday the 16th was a day for the record books.
First in the Metals, we had Gold and Silver posting new all time highs and high settlements. In the US Stock Indexes, we had new 1-year highs and 1-year high settlements (Actually 13 Month highs, but 1 year makes more sense).
In fact, in the S&P Cash from the March 08 Lows at 666, we have rallied 547 handles to today’s high at 1,113. I wrote earlier in the day that I can’t imagine anyone at your 4th of July Picnic would have taken the over/under bet for these Stock Indexes.
I know no-one at my party thought we would see 1,000 in the S&P until about 2014… 🙂
Now for a quick re-cap of today’s numbers. Gold Futures posted a low at 1,119.50 and a new all time high at 1,144.20 with a new all time high settlement at 1,140.20…
Silver Futures posted new all time high at 18.450 and all time high settlement at 18.405, with a session low at 17.4750.
Crude Oil was a bit of a laggard, posting a low at 76.35 a high at 79.43 and a settlement at 78.91
On the charts, crude oil futures have resistance at every dollar point beginning with 79, 80, 81 and 82.
With the metals, it honestly is any one’s guess as to where we will hit resistance.
Most likely we will have dollar resistance bands in the silver and 25 to 50 dollar increments of resistance in the Gold, as new highs are digested, and fomented upon in the financial and general press.
Finally, the Stock Index numbers for the day’s session. In the Dow cash we had a new 1-year high print at 10,465, with a new 1-year high settlement at 10,406.
In the Dow futures, we had a day session low at 10,240, a new one year high at 10,404 and a one year high settlement at 10, 368.
In the S&P500 Cash we saw a low at 1,091.00 a new one year high at 1,112.25 and a new one year high settlement at 1,106.50
I am almost certain we will continue to rally, and I base that opinion on this one fact. While I was running on the treadmill this evening, reading the closed caption on the TV’s at my gym, I notice the following fact… To a TEE, every financial show was talking about how the rally was unsustainable, or some such similar story…One headline in fact, was a large, bold face, all capital footer reading “Is the market due for a year end correction?”
The fact that they are even having that discussion seems to be a giant fading signal. In other words, do the opposite of what they are worrying about. Go ahead and be comfortable on the long side. These individuals have been bearish and squawking all the way up. Every new high over the past year as we scratched and clawed our way higher in these indexes had one thing in common. With each new high we saw interview after interview with bearish analysts, talking about how their analytics and models and crystal balls all were saying the end was near.
I would say don’t look for a 30 percent correction on the down side until they start bringing out the Perma Bulls talking about Dow 25,000 by some not too distant future date…At that point, however, I would definitely start packing a parachute for the base jump of all base jumps…
For tomorrow, we may get a turn around Tuesday in these Markets with some more profit taking on the horizon. If that’s the case, then take advantage of it, but resist falling into the trap of becoming too bearish.. We are due for a correction because we have come far and fast in a short period of time. In every article I have read, the notable fact about this rally in equities has been the light volume characteristic of the rally.
Generally we like to have heavy volume in sync with the general move of the trend. We have not gotten the heavy influx of new money, and that is a worrisome fact which will impact the length and breadth and the staying power of this rally.
I have written before that you want to be careful, when the heavy volume comes into play, it may push the market up to new highs in an exhaustion top, as sideline watchers, hand wringers, and other Chicken Little’s get over come with their bearishness, throw in the towel and get long to join the herd, and then and only then, will we be set up for a bigger correction.
Good Trading