Wed July 27, 2022
Our thinking is that the DJIA will achieve the early June high around 33,250. Today the reaction to the FED hike seems to confirm that prediction.
NASD
A left is the FIB re tracement levels. 13,377 seems to be a logical target. We stick with 33,250 for the INDU index.
TLT long bond
TLT a fund of long dated bonds did drop on the rate hike but let's see what happens the rest of the week.
Gold Silver
We have noted the US Dollar has weakened slightly. Today gold and silver may finally be indicating a low. The low in silver was 18.12. It now appears that WAS the low.
Natural Gas
After soaring to over $9, natural gas corrected back to $5.50. Now it has advanced again to the $8 area. Putin re started the Nordstrom pipeline but is only running at 20% of capacity. Decisions made by Ms. Merkel after the Japanese tsunami in 2011 have come to leave Germany near totally dependent on Russia for natural gas. While nothing had occurred to German nuclear reactors, she planned to close them and German coal fired plants. This left Germany depending on Russia before the Ukraine invasion. Now that dependence is Putin's bargaining chip. In the US there has been a series of recent fires and mishaps shutting down natural gas facilities.
Crude Oil / Gasoline
Crude soared to $125 / bbl. But oil is settled internationally in U S Dollars. The precarious situation of the EU now depending on Russia for natural gas has depressed the Euro and strengthened the US Dollar. Priced im dollars, crude oil prices have fallen. Now the Euro trades at parity or one for one to the US Dollar. So thanks to Merkel, not Biden, for lower oil prices. The present high demand for oil has led to backwardation, current month oil is trading for more than distant, a year out, oil. So the current price has fallen below $100 to try to eliminate that price difference.
Let's look at adding some silver postions tomorrow. Next update tomorrow morning
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