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March 5th, 2009 Posted in Uncategorized
Today appears to be an inverse of yesterday. Yesterday in the stock index futures, we saw the markets sell off from their highs into the close. They still posted nice gains on the close, but none the less fell off some into their closes. I kind of thought that showed some lack of continued zealous buying, but I did not necessarily expect today's rather substantial selloff. At the time of this writing, we have already taken out yesterday's low in the SP500 futures, but we have not yet seen a landslide to the downside as we are just above that level now. Tomorrow we get the employment situation numbers, and my "hunch" is that the market will think it wiser to square up for the day ahead of the number tomorrow. Please see the TradeHugger calendar to see what the expectations are for the number tomorrow.
Interest rates had a nice pop. Presently June Bonds are a full 3 points higher, though looking at the daily chart it is just a blip after the big break from the 140's that we've seen in that market. I'm not so sure that bonds, particularly long bonds, are going to be able to sustain a considerable rally - what with the Treasury printing money like it is/will be doing for the foreseeable future. But for now we'll let the "flight-to-safety" bidders have their way.
Grains and oilseeds settled lower today - giving back a portion of yesterday's gains. Similarly, live and feeder cattle futures fell off today. Among other reasons, the stronger US Dollar, weaker equity markets, & weaker energy markets contributed to the lack of follow-thru from yesterday's gains.
The softs ended up mixed. Orange Juice enjoyed a pop today to the tune of a 3.5 cent rally, but the balance of the softs fell off some. New crop cotton is a market that is on my radar, as the balance sheet is indicating a tightening suppply down the road. Alternative crops to cotton are offering a better return on paper to producers, and it will be interesting to see if those economics work their way into the acreage numbers that we'll get a glimpse of at the end of this month in the USDA's Prospective Plantings Report. The considerable pressure in the cotton market has been the dawdling economies, and the expectation for considerable textile and apparel demand to be slow in returning.
June '09 gold fell from a high of $1009.80/oz. to yesterday's swing low of $902.20/oz., a roughly 10.5% decline in eight trading days. Today we see a bounce of about $28.00/oz. - a long overdue bounce. I imagine that the manner in which the market discounts tomorrow's employment situation numbers will determine whether or not gold will continue to bounce.
All the best,
Bob