Thursday Feb 28 2013
Stocks Power up to Ramming Speed
WSJ article Section C today
As I recall that phrase was from Ben Hur just as the slave powered galley ships were about to ram one another. That didn't turn out well as you recall. But social mood has really turned positive for stocks.
It's looking a lot like 2008. Stocks are moving higher and higher and the market is ignoring some clear signs of inflation. That is how things ended in 2008. All the world wide money printing has resulted in speculation and higher energy prices.
Stocks
The New York Stock Exchange index has moved relentlessly higher hardly stopping for a breather. Stocks bounce back from rapid sell offs, typical of bull market in full force.
Gasoline
93 octane is near $4 retail. Gasoline futures have backed off to fill a gap but frankly I expect will find support at the $3 level. Energy is the master emotional market. Crude soared from $100 to $145 in a matter of weeks in 2008.
Pessimism is at an extreme for gold and silver. In some surveys bullish sentiment is in the low singel digits. It appears there was a concerted effort to drive the price down, which worked by the way.
This is a thirty minute chart fo GDXJ. It shows a modest bounce from a terribly oversold condition. Gold rallied since Feb 21. We suggested it would come back to test 1600. Yesterday it fell through 1600. This morning it is slowly moving up from the sub 1590 level. This is the last day of the month. A more positive outcome would be a positive close today. We will continue to report.
The US Dollar backed off a bit yesterday from its breakout condition. The Canadian and Aussie Dollars had a weak bounce yesterday. As always the commodity currencies of those two countries need to get going to spur metal and other commodity prices.
Canadian Dollar
Oversold enough to rally? The rubber bands of the Canadian and Aussie versus the US Dollar have really been stretched, this ought to be about the limit but we shall see.
thanks for reading The Market Perspective.
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