No matter how much caffeine the cable news hosts ingests, you can’t make a range bound market ‘exciting’. And we are range bound in these stock indexes. We have continued talk about dollar strengthening, but unless we break above 76.25 and re sume the rally, this could be nothing more than a temporary bounce. The currency issue is the issue of the day, so you have to watch it, no matter what you are trading.
I concentrate on the grains, the metals, crude oil and the stock indexes. Each one of those moves in relation to the dollar fluctuations. Therefore, you have to keep that chart up all the time. It is the tail that wags the dog, vice verse, but you have to watch it to limit your losses.
To start lets look at the stock indexes. Both the S&P and the Dow are higher on the day, but have not made real moves towards their upper limits on the charts. Again, this time of the year its a shake and bake trade. Both indexes opened higher and have caught bids but have not had large trading ranges. SPZ9 has a low at 11000 and a high at 110630. There is resistance at the 111000 level, and then again at the 9-month high at 1011600 area. We look like we got a little oversold during the correction. The charts look like the indexes want to drift sideways to higher in this formation.
DJZ looks very similar on the daily charts. today’s high at 10430 and low at 10400 gives you no real chance to trade it. I would stay away, and wait to see if the market catches a technical bid and tries to take a look up at 10500 where we have chart resistance.
Bottom line, we have slow, choppy, technical markets and the programs are out there just searching for your stop orders in a thin order flow environment.
Corn Wheat and Beans all had basically slightly bearish crop reports overnight. Carry outs for all three were slightly higher than expected. On the day, SF is down 3 cents at 1025 1/2 with a low at 1022 1/2 and a high at 1032. We haven’t been able to hold a bid very well today, even though crude and gold have rallied slightly.
March Corn has a 15 cent trading range with a high at 395 1/2 and a low at 380 1/2. Its the leader today, sitting at 392, up 8 1/2 cents.
This looks like a spread day, with corn and wheat being bought against sales in the beans.
March Wheat has a 13 1/4 cent trading range with a high at 543 1/4, and a low at 530. Currently we are at 538, up 2 3/4 cents.
In the metals, some of the pressure had subsided after we had our 62 percent pullbacks. Gold has found support at the 1,120 level, basically 100 bucks off its highs. Silver has found support at 17.20, basically its Nov chart low, after rallying trading to 19.50 just 6 days ago.
Again, you can thank electronic trading for this volatility. 6 days ago, gold was 100 dollars higher as well. But with the flow of money around the globe, the programs funnel money into one asset and drop other’s like hot potatoes.
We saw the funds drive up corn and the soybeans this fall. At the first of the year, these index funds will be back with their buying shoes on, if history is any guide.
They will be flush with new money and they don’t get paid to sit in cash. Most likely, they will return with their macro-economic trend trade, short the dollar, long the physical commodities. Or at the very least, they will be re-balancing their portfolios and getting long for 2010.
For now, it looks like a Holiday Christmas/Hanuka Chop
