The Stock indexes rallied all morning, but once 2:15 EST rolled around, we saw the indexes melt lower, still ending the day up, but giving back a major portion of their earlier gains..The DJZ had seen a trading high at 9887, but fell back and settled 100 points off that high at a final mark of 9781…SPZ500 had a high print at 1058, but broke 11 handles from that high, to settle at the 1047 level.. Both indexes still have a ways to go to challenge their Oct 21st High prints, with DJZ posting a high at 1060, and SPZ posting a high at 1098.
For the rest of the week, we have Unemployment to look forward to at 730CST Friday Morning, the first Friday of every month gives us that stat… Yesterday there was a number out from a private survey from ADP— that they expected initial filings to be 260…If that holds true, it shows that the pace of lay offs is slowing, but most of that is a function of the fact that there are less and less people available to lay off…We have been whacking 500K plus every month for a while now, given that the Holiday’s are around the corner, it makes sense that the pace of layoffs would slow… I think its doubtful there will be a huge amount of demand for Holiday Help, given the dismal mood of the US consumer.
It was a wild ride to day in the commodities, Winner’s were led by the new Gold Bugs, who put out a new all time high print at 1098.50. We have seen a 60 dollar rally in 5 trading days…. True to my prediction, the radio business analyst I listen to just about soiled his undergarments from the sound of it, as he breathlessly talked about “eleven hundred dollar an oz. gold”…He will probably have to call 911 when and if we have our first 1,500 an oz. print on the tape..
Crude oil moved higher, to once again settle above the 80 dollar level…I am sure my neighbor hood citgo will go out and jack up the price ten cents… Its already above 3 bucks here for mid-level octane, with regular 87 going for 289…
The 5 dollar break we had seems to have just been a breather for the next move coming to get us back up to 100 dollar a barrel oil over the next few months..
Gasoline futures traders will get a second chance to catch a bull move, as once again, much to the sadness of Anderson Cooper on CNN, we did NOT have another huge Hurricane come in and wipe out our refinery capacity in the Gulf of Mexico…
What happened to all those scientists last year predicting a “super-cycle” of category 5 hurricanes on the horizon due to Global Warming? My guess is they are hanging out with Al Gore, patiently waiting for next years crop of storms in hopes they will get to be on TV once again…
Favorable weather and a ton of early fund selling backed the grains off of their early highs…We are seeing Volatility come back, which is good and bad… On the opening bell, SX looked strong, but then melted 20 cents in about 3 minutes… Anyone that stepped in front of that monolithic wall of selling had only a couple of chances to recover… We had a 12 cent rally after we went down and violated 10 dollars the first time… For the day, we had a low in SX at 991, to settle at 995…On the daily charts we have a double top with Today’s and Tuesday’s high at the 1021 level… I can’t imagine why we shouldn’t go back and test that high again… all it will take will be another weather scare…But for now, the trade seems to think that the harvest will get caught up this week, before the rains come back in ten days..
Corn and Wheat all had similar volatility, and all ended higher on the day as did SX… On the charts, the grains look vulnerable to some more retracement on the down side, however, today’s trade did enough to take the starch out of any weak new longs…CZ had a high at 398, WZ had a high at 523 and SX had a high at 1018 in the pit…CZ had a low at 282, WZ had a low at 515 and SX had a low at 991….Thursday and Friday should see continued whippy trade around these numbers…Next week we have USDA report on Tuesday, so that might temper the trade between now and then…
The recent volatility in the Grains can be traced to the all important “Dollar Carry Trade”…
In effect, we are trading currency markets via the grains, and because of that, we should expect continued ridiculous volatility, often with little, it seems, rhyme or reason…
Good Trading