Indicators starting to turn up in gold.
Looking at the gold market positively for the first time in quite awhile. Some indicators which have been down solidly since April/
May are beginning to turn to the upside. For leadership, look at
the silver market, which usually leads any significant move up or
down in the precious metals. Silver prices were sharply lower this
morning, we were down 10-12 cents early in the day. Only closed down
a couple of cents, near the highs of the session. As long
as the March silver contract can hold above $6.00 an ounce in the
face of the expiring Dec. silver contract, which initiated the short squeeze that began the current rally, we could accelerate up from
here. The next leg up in silver should bring the gold market up
with it. The first challenge is at $300, if we get above that we're
looking at $325-328. Gold down $3.70 at $292.50, Mar. silver down .02
at $6.33.
Range trading in the stock market. Resistance at 969-970 on the
March S&P. Support should come in at last weeks lows at 941.50.
We came in today about 14-15 S&P pts. higher today following the stability in Asia. Were quiet most of the day following the strong opening, with a burst up at the close. As long as we are within these ranges this week, I don't see much else happening. Would
be a seller in the stock market at these levels. I think that we are
near the top of the recent range. Might buy in at support around 941.
For the next 2 or 3 sessions I wouldn't look for much change outside
of those parameters. S&P closed at 966, up 20 pts.
The bond market has gotten quiet over the last 7-8 sessions. Running
out of upside momentum in the very short term that could lead to a pullback down to the 119-119.50 area. The longer term picture
for the bond market is very positive. Recent economic reports give no hints of inflation. The fed open market committee left policy unchanged in Dec. and nobody is expecting any change in policy
in Jan. Strong technical momentum, strong long term outlook. We have to consider the Asian demand for bonds. Every time we see their stock or currency markets go into turmoil, they are rushing over here buying our treasury bonds as the "safe haven of choice", and would expect that to continue over the weeks and months ahead, as we have not seen the end of the turmoil in Asia. Bonds down 1/4 at 120.17.
The energy markets ran out of gas today, as prices moved to their
lowest levels this year. Many factors have come together to push energy prices down over the last few weeks and months. Today was the
start of the traditional strong seasonal down time for Dec and Jan. in
the heating oil market. Over the past 15 years, between Dec 29 and
Feb. 2, heating oil prices have moved down 87% of the time, 13 out of
the past 15 years. This is contrary to what most people believe.
Winter time is when we see heating oil prices move lower, and we saw
that happen right on schedule today with heating oil move below .50
for the first time this year. Crude oil closed below $18.00. Not only the seasonal factor to consider, but a number of other things
to look at also. The recent report from the AMERICAN PETROLEUM
INSTITUTE (API) have shown consistent builds in energy products over the last few weeks, OPEC raised their quota, and probably their cheating as well. Technically, the market is very weak with a number of gaps on the chart which is pressuring prices further, and todays
break below $18.00 per barrel brought in even more sellers. Next support is at $17.35 on Feb crude. If we break through that, we could
go down to the $16.50 area. Feb. crude ended at$17.62, down .58.
Heating oil closed at .4958.
Happy new year to AL(L).
Bobby, have been doing much pondering lately, expect an e-mail
in a few days.
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