Both stock indexes are holding firm today, with the S&P500 posting a fresh new 14 month high and the Dow within 80 points or so of its 14 month high at 10566.
Fundamentally, US stocks got some better news today, as existing home sales rose.
Time will tell, though if this is for real, or just a dead cat bounce. There is still an enormous supply of existing homes out there which have to be dealt with at some point.
To me this is looking like a potential exhaustion point for a housing bubble which took basically 3 years to sloooowly deflate. That being said, I can’t imagine its going to re-inflate in 3 months.
In the grains we have had some stabilization after this morning’s flush lower with the higher dollar. We had a nice short covering rally this afternoon, as WH was able to settle higher on the day at 522, after falling to a low this morning at
516. March corn, CH, posted a low at 393 1/2 this morning, but settled at 398, only 2 cents lower for the day. The whipping boy today was Jan beans. They tested the support this morning with a low at 985, but rebounded to settle at 989, “only” 12 cents lower.
I think this trade this morning was a case of traders getting chopped to bits by the ginsu knives. They sold the contracts when they looked the worse, but there was no follow through, and then there was a race for the exit. The action in wheat is somewhat positive, due to the fact it was a bullish hook reversal on the daily charts. WH still has a way to go to settle above 530 and turn the short-term trend to cautiously bullish from its current neutral tone. WH is basically in a 3 month sideways chopp from 510 to 600. The moves in between those levels are looking like a bunch of white noise.
We won’t get a better focus on things until January.
That goes for all of these markets. Remember, no one is really at home, which makes trading really difficult at this time of year.
You tend to get one or two chances a day, and if you are wrong, you are wrong, with little chance to trade through it and recover. This time of year, money management is the most important thing if you are actually trading. Its too easy to get chopped up in these markets right now.
Good Trading
