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OUTSIDE MARKET DEVELOPMENTS: With a slightly higher overnight equity market bias and a weaker US Dollar the bias toward precious metals prices has seemingly improved from the view that was in place on Monday morning. It is also possible that very favorable German ZEW readings overnight served to tamp down the resurgent macro economic slowing fears that seemed to dominate the headlines over the prior two trading sessions. The bull camp might also be getting a slightly positive draft off gains in the energy complex in the early action today. While some analysts suggested that the Home Depot earnings this morning were positive, the initial reaction in the equity markets was a slight setback in stock prices. With the US Housing Starts and Permits report due out later this morning, the markets are probably reserving their judgment on the direction of the economy. Initial expectations call for a modest improvement in both housing starts and permits figures, with the trade also expecting minor gains in the PPI report.
SILVER MARKET FUNDAMENTALS: While the bull camp might suggest that a rally back above $14.00 is a positive in the action today, silver and other physical commodity markets seem to need something positive from the economic report front in order to get out from under what has been a fairly aggressive pattern of selling over the prior two trading sessions. The bear camp will suggest that a minor slide in the Dollar and a short covering bounce in the equity markets has given the bull camp false confidence this morning and therefore the markets reaction to the scheduled US Housing data later this morning, could be the main event of the Tuesday trade. Some traders think that the onus is on the bull camp in silver, to prove that the recent letdown in the macro economic outlook is temporary and therefore it would seem like the direction of equities might be a touch more important, than the direction of the Dollar in the silver trade today.