Wall Street finished off its low but goodness this is getting serious. If “they” are going to attempt to rally Wall Street, they had better get the big guns out otherwise, we will certainly soon understand what bear market territory means. Rates were lower again but I do think that there is a pretty good chance that they bottomed last night or have begun that process.
And then just to make things even more difficult to untangle, the dollar instead of weakening on lower rates, rallied. Not substantially but enough to put pressure back on commodities with the result that we saw gold weaker. However, palladium, which has done such a good job of leading precious metals for the past six months, had a bad day. I have been worried about gold because of the pattern that our own gold index – XGD – has been forming and perhaps it was giving an early signal on gold. This morning it looks as though this might be the case. Not happy either that the commercials are now back on the short side. I have mentioned many times over the years that I like to keep an eye on what they are doing. We had them net long at the recent low – the first time in 17 years. Now they are net short and substantially so.
Crude had some difficulty handling the rarified air above $60 and eased back. But they sold the soybean market off sharply. Are the talks off again? Goodness this on again, off again rubbish is getting boring. Looking across the currencies, the poor old Kiwi got judged very harshly and finished sharply lower. Not sure what they have supposedly done wrong but whatever it was it created some entertainment for the currency traders.
And one little snippet – the Brazil market has been the strongest since their election - broke downside last night.
Coming back to our market, we have failed over the past month to take advantage of any good news and have continued this sideways pattern. Be unfortunate if New York rolls over again as our banks were finally looking as though they might be able to rally. Mind you this section has been so weak for months - quick to take advantage of bad news but slow to pick up each time on the better outlook. But run back over five years and banks have been a rotten investment so hard to get excited about anything with them.
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