The Markets all breathed a sigh of relief after the Fed held pat and indicated that they would not change rates at this time. There was also indication that the Fed is more worried about unemployment than inflation at this time.
The Dollar Index rallied to settle on an new 2 month high above the 77 resistance level. That opens the door up to a continuing rally up to the 80-82 level. Gold and Silver rallies as well, despite the dollar rally, as evidence that, for now we are in a corrective rally towards equilibrium in both those metals. March Silver rallied to a high at 17.805 after posting a low at 17.350 Feb gold posted a high at 11425 and a low at 11224.
Silver looks like it could rally to 18.25, while Gold has a target at the 1,175 area.
Stocks settled near their highs, as SPZ bounced of a high at 1116.30 after posting a low at 110970. The Dow futures had a narrow range again, with DJZ posting a high at 10502 and a low at 10470. These stock indexes continue to look as if they want to extend higher, possible to a 62 percent retracement of the large downmove from Oct 2007 til March 2009. Currently, as I have written before, we have had the 50 percent correction, and for the time being, the charts look like they are building a congestion pattern here for a bullish push at the first of the year.
I continue to think a whole lot of people who puked their stock holdings las March with the S&P down at 666 and the Dow Jones down at 6500 are now looking on in dismay. They missed the rally, and now that things look safe again, they may jump back in. That would be the volume surge this rally has been lacking. Once that is digested, then we will see, if the same people who sold the low, are now back in to sell the high.
Interestingly today, Crude oil shrugged off the new highs in the dollar and had a mini bounce. AGain, more of a technical response to the market being oversold, it looks to me. Jan crude oil spiked to 73.55 today after posting a low a 70.59. Crude looked over sold and has a chance to rally back up to the 76.50 area, which is a 50 percent pullback after the recent highs at 82 only a month ago, gave way to a move below 70. Twelve Dollars from top to bottom, gives us a halfway target at 76.50.
Finally, in the grains we finished higher as well, but well of the intra day highs, as we had some hedging in the afteroon.
SF had a high at 1070 1/2, a low at 1051 1/2 for a settlment plus 4 1/2 at 1059 1/2. A twenty cent range, where we were once again held by resisance at the 1070 level. Just a week ago we were trading at 1020.
March Wheat posted a low at 528, a high at 543 to finally settle at 537 1/2 up 1/2 cent. March Corn had a high at 413 1/4, a low at 403 1/2 and a settle at 410 1/4 up 2 3/4 cents.
The spike in the dollar gave us our volatility in these grains, but they held up surprisingly well.
Good Trading
