Today is our day off in honor of MLK. Tuesday through Friday, the stocks will focus on earnings. Since most companies have discounted so much already, which I wrote about before, I can’t see any surprises on the horizon except for surprises to the upside. No one wants to disappoint earnings, so they just lower the bar so low that an ant could jump it. After, all, we are still in a funk, with 10% unemployment, and the consumer starting to save more than spend more. In an economy driven for the past 20 years by the consumer, that could be a problem.
Despite that, I still think we’ll see 11000 printed sooner rather than later in the Dow, Ditto for 1200 in the S&P. The level of bearishness and uncommitted funds on the sidelines makes me think that.
In the grains, the story will be when and if the funds will puke. And I am talking about the commodity funds, not necessarily the index funds. Index funds buy and hold. Trend following commodity funds may be moving towards exit levels in the corn. A good push down below 362 in the CH would spell wash out time for the weak longs.
Watch the dollar index, watch the crude, and watch harvest reports out of Brazil and Argentina. For now, I think the grains look vulnerable to a down draft, which will be set off when and if the funds flip out of their longs.
Good Trading
