We had another new high this morning in Gold at 1111.70, we have also seen SPZ hug the trend-line I pointed out to you several posts ago..Its always nice to have the right technical analysis as you look for trades…SPZ is currently flirting with the 1085 level, with the contract within a stones throw of its old high at 1099…If the SPZ can pop above 1100 with a strong increase in volume, then we should see continued short covering rally fueled by frustrated new longs who missed the rally up from last March Lows… As the year ends, money managers will be dressing up their portfolio’s so that at year end review, they can have some of the best performers on their sheets. Remember, mutual fund managers get paid to own stocks… Not to be in cash…Also they are not allowed to short, that is the specialty of the “Hedge Fund”, although as a species, most hedge fund managers had a culling of the herd over the last year and a half…Only the best survived, and many a fund is now long gone..
Inflows into the market as people fund their IRA’s and 401K’s will serve to provide fresh kindling to this stock rally.
That being said, I am still concerned about the level of bullishness reported at 90percent…If this last 3 years has shown us anything, its that even when the best and brightest all get one way, its probably time to step aside for a breather..
In the Grains, we have has a nice rally today… We indeed went after last night’s high in Jan Beans at 971, posting a session high so far at 975…The market had such a melt-down last week, it was overdue for a correction to the upside… There is still a bear trend line up a 1018 in SF to contend with, and a bull trend line down at the 900 level..
Good Trading