This morning’s break in crude went right to the target of 86.34 with a low at 86.30.
Resting orders there covered all shorts.
It looks like we might have another flush, as the market focus shifts to the Fed.
Honestly? Do you really think the fed will raise rates? I am in the opinion they may do some sabre rattling, most likely as a kow Tow to our recent Chinese visitors.
After all they do own 11 percent of our debt..
However, when the smoke clears, we still have high unemployment, with very little real indication of inflation, when you take out energy and food. Not that anyone in America eats or drives a car….
Bottom line, core inflation, the thing that policy wonks look at, is still negligible. So I can’t see them falling all over them selves to do any thing too radical, too soon.
Of course, what do I know. Its just my opinion. I am sure raising rates would really help small business and the housing market. Especially given the fact that sates and local municipalities are raising taxes to cover expenses. It all makes sense once you’ve gone down the rabbit hole in Washington D.C.
Out here in the mid-west, all we have is the looking glass.
By the way, it looks like corn has indeed put in a double top at 666-667. I could see a dollar haircut in the next 10 trading days to scare some producers into moving some grain.
New crop beans and corn are at 2-1/2 year highs. People are looking back at the chart highs from the Summer of 08. Once again, we are generals fighting the last war, looking in the rear view mirror. Bottom line, we need a correction in corn and beans.
As for March wheat, its all set up to once again chopp back to 8.00 Last nights low at 8.20 is just 20 cents away from that support. Might we see that to spook out those (myself included) who got friendly after the break out above 8.00? I would not be surprised.
As for the stock indexes, we have to get the 12000 print and the 1300 print in Dow Cash and S&P cash respectively. Those prints should bring in momentum traders. If the fed gets hawkish, and the stock market holds, that would be a real sign of underlying strength. Remember, there is a ton of cash sitting on the sidelines. If they jump back in the pool, it will cause a hefty wave.
That is all.
CER
