I am not sure what is going on in many of the markets that I trade/monitor today but whatever it is, it is certainly very odd. There have been some incredible price swings today in so many markets that I cannot name them all here. Suffice it to say, the computers are once again wreaking havoc, all with the blessing of the exchanges, I might add, who love the fees that they generate from this meaningless churning.
As mentioned in today's earlier post, gold has been all over the place. If you look at the 12 hour chart posted below, you can see one big candle with a large upper shadow and a large lower shadow. Would you like me to translate what this means in trader lingo? Here we go:" What in the hell is going on in this market?"
I could say the exact same thing when it comes to the soybean market, the yen, the S&P 500 and the bonds. Hell, even the coffee market is strange today. The US Dollar soared earlier only to set back as the Yen moved higher on that stupid "safe haven" trade that more and more infects the brains of traders who should know better that to stash money into a nation with a DEBT TO GDP ratio of over 200%, which is banana republic territory.
Gold found support beneath the psychological level of $1300 and at the technical level of the 25% Fibonacci level of the recent retracement from the low below $1260.
Where it goes from here is anyone's guess. All that I can say about it is that if it were to now breach today's low, it is going to $1280 for starters. If it can climb above today's high, it should be able to push to near $1340.
One would think that with interest rates near zero over in Euroland as a result of today's surprise rate cut, that the Euro would be struggling to hold water. Not so! The damned thing has managed to move up nearly a full point and a half off its session low. Go figure! Then again, don't go figure because that is an enormous waste of brainpower and effort.
It does seem however that as the US equity markets move lower, the Euro and the Yen are strengthening and the Dollar is weakening. How long this lasts is also anyone's guess.
In Summary - who knows what, why or when things are doing what they are doing.
One thing I do know however is that we have a biggie of a USDA grains report tomorrow AM. That should be fun if today is any taste of what we are likely to get coming off of those numbers. Remember, the USDA missed last month's report due to the government closure. This adds another element of volatility as it makes it about 2 months since we have had some "official" data to work off of. Lots of private firms are coming out with their numbers but those will get trumped by whatever the pencil pushers over at USDA give us.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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