There might be a decent trend line to trade around here in Gold. It has a solid 3 point. Begin with the high in Dec gold on Sep 6th at 1923.70. The second point is on October 28th high at 1755.40, the Third point is today’s high, November 2nd 1742.30.
I would initiate sales against this trend line.
Moving to the grains… We had a huge bounce late in the day from what looked like EDFMANN positions being liquidated. We saw the same move in the meats as well. Mann had once been responsible for 1 out of every 5 futures positions in the entire world. Forced liquidation of those short positions can’t really be factored into as a “trading event” or a fundamental change. I’d be inclined to lighten grain positions until Friday of this week or Monday of next week. On Next Tuesday, Nov 9th we have another USDA report.
As for the stock indexes, we still have to get through Friday’s vote in Greece on the austerity moves. We never got down to our first target yesterday at 11,507. 11,570 was the low of the move. We are currently trading at 11,772.
The one bullish item I like on the stock indexes is the apparent double bottom in Dec Dow futures down at 10,400 level. That may prove to be our low for the next 8 to 12 months.
CER
