continued......
Gold has bounced off the psychological support level of $300, but
the technicals remain negative. Last week we heard rumblings of sales from the bundesbank, stories of Swiss sales for weeks now, inflation figures for the PPI came in lower than expected, Greenspan mentioned that gold is still a gauge for inflation, and technically the chart is littered with gaps to the downside which are going to act as resistance when the market starts to move up. All momentum indicators continue to point lower.
The only positive in the market is silver, which is still above $5.00 per oz. That level is because COMEX stocks have gone way down in NY,
but that continues to support the market a little bit. Overall with
the gold market, very little to get excited about. Dec gold up .40
to #304.70, Dec. silver up 3.8 cents to $5.1180.
Given todays selling, it appears that $20.00 is the next target for
the crude oil market. Prices sharply lower this morning in response to the diplomatic measures over the weekend which should ease some of the tensions in Iraq and take a great deal of uncertainty out of the market which has been supporting prices. Fundamentally, we have
ample supplies of crude and heating oil as the recent API reports
have shown net buildup in the past few weeks. Seasonally, we are in
the weakest time of the year for the heating oil market where prices
traditionally go down as we move into the cold winter months. This
is the opposite of what most people would believe or hear, but
traditionally this is what happens as suppliers look to liquidate their inventories during the winter rather than carry them to the next year. Given the easing of tensions in Iraq, look to the sell side
on significant rallies in the energy market. Jan crude down
.68 to $20.48.
Trading was quiet in the grain markets with the harvest almost complete here right now. Traders are now looking towards developments
in the Brazilian crop where it is now the planting season. Some dry weather over the weekend was welcomed by farmers and this put pressure on the soybean market this morning, but late in the day orders
came in to buy, and prices ended on the plus side. Use strength to enter the long side of soybeans. Corn and wheat also higher. Jan
beans up .025 to $7.2625, Dec. wheat up .055 to $3.455, Dec. corn up .0575 to $2.7775.
We could have reached a significant turning point in the stock market from a trading point of view like we did last Thursday where we were
at 7350 and went to 7750. Four hundred points in three days.
Short term technicals indicate a pullback over the next few days in the stock indices. Then we'll see where we go from here.
No evidence of a bottom in gold, but we may be close. Will probably
break the $300 level sometime this week, and that may be the major
low. Should find out within the next 1-3 weeks. |
