Bonds Metals etc

The money continues to pour out of the US long bond and into everything else. What is it signaling and since this rally started I have been writing that the bond market is topping at the same time that QE is ending and that is something you wouldn't normally expect. With the economy declining and jobs in a precarious situation and all the debt crisis news all over TV you'd think stocks and commodities would be falling everyday, right? But as you can see by the charts the opposite is happening and that tells me that more easing in on the way or there is inside knowledge that there are talks of it and people are playing the rumor. If it doesn't happen we will be right back down in a heart beat, that you can bet on because there is no fundamental reason for this rally, PERIOD.

As for my largest position, Silver, its seems to be topping out here, I doubt (Physical or Paper silver)  will get over the 50dma even though it has pierced its downtrend line its still range bound, and won't look good till it gets over 38, if that happens i expect gold to be making all time highs..

S&P 500 Recap and A Look Inside the Markets

Good morning, S&P futures are flat this morning as we await the NFP number at 830 and then the wholesale inventories at 10am. We had a big rally yesterday on jobs and stronger than expected retail sales numbers. 

Today's headlines show that economists expect hiring to have improved significantly from May, when the economy added just 54,000 jobs. The consensus forecast predicts only 90,000 jobs were added in June, according to a survey by FactSet. But a batch of strong economic data this week has inspired some last-minute upward revisions. Many economists now estimate that employers added at least 120,000 jobs. And some are predicting as many as 200,000 net new jobs for June. The unemployment rate is expected to stay at 9.1 percent.

Yesterday's session began 10 plus point gap up, there were no significant dips intraday and buying remained steady through out the session and we ended up near the highs of the day and more importantly above resistance. We had 80% of stocks advancing and 19% declining. 

Breadth had been absolutely fabulous, MO is overbought and the MSI has moved into bullish territory. We have now had 6/7 up days and big ones at that, expect this to be a fade the good number type of situation, the indicators are now setting up for a pullback, especially the MO. 

In retrospect this rally was most like in anticipation of a good jobs number. The big houses get the information and game the markets and if you don't think the game is rigged you better get out of this market.  

 

Evidenced by the recent JPM settlement over muni-bond fraud, I wonder how the screw ups at the SEC had the balls to bust the FED fav JPM don't they know about Bennie and the Diamonds relationship, how dare they. If you or I had done what JPM did we'd be in jail for a hundred years, whatever! No one really cares, status quo, right. In any case, what reason would the stock market have to rally, QE perhaps to be announced soon, who knows. Play with the cards dealt friends. 

Copper Goes Into Bull Mode

I had mentioned this a few posts ago about how important a tell it is for copper to hold its recent move above the 50dma and now its seems copper is in bull mode, above the 150dma and in full volatility expansion.

Commodities are also above the 150dma, there has to be some underlying reason for this move. I love the fact there is no news and we are having this huge rally. There is also a lot of fear right now which is extremely bullish.

Just a few points away from a 52 week high.

SLV is now firmly above its recent downtrend line and above the 150dma I doubt its going to break through the 38 mark, that is big time resistance and though I am happy with this recent move I doubt the good times will last. I'm a seller at that level.

"I think the dollar chart basically confirms my point that quantitative easing will be started again soon.  Last week’s big jump in the major stock market indices is basically saying the same thing.  All we need now is an indication from policy makers that QE3 is imminent.  The effect this will have on gold and silver will be nothing short of spectacular given how sold out both of the metals have become during their correction over the past two months." 


~ James Turk 


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He forgot to mention whats happening in the long bond

A thing of beauty

Silver and gold have been moving up pretty hard over the last couple of days, maybe over Greek default as per S&P  or perhaps we have QE coming, who knows but I'll take it.

S&P 500 Recap and A Look Inside the Markets

Standard & Poor’s has put European policy makers on notice that a rescue package for Greece that involves losses for private bondholders would put the country in effective default, casting doubt on a French proposal designed to get banks and insurers to help shoulder the load of a second bailout. From the globe and mail july 4th. link

Gold and Silver began to rally, Monday and that has continued this morning, Gold is up 20 dollars and silver is up 60 cents at this time. S&P futures are up slightly.

This past week was amazing for stocks and the rally basically came out of nowhere and without significant news could it be just optimism of Greece's debt crisis resolution, don't think so. I think something bigger will be announced this week.

Looking back at the last session SPX again opened with a nice gap higher. The big move of the day came right at 10:00 am as the ISM data appeared to create more excitement than deserved. The rest of the session simply continued to crawl higher without any significant pullbacks along the way. The bulls are in full control, for now. It is amazing the difference a single week can make. Last Friday afternoon it seemed like the sky was falling; this week it seems as though the bulls are unstoppable. It is just mind boggling. 

For the SPX Index there were 452 components advancing and 24 components declining. On the NYSE 3,138 issues were traded with 2,518 advancing issues and 544 retreating issues, a ratio of 4.63 to one advancing. There were 168 new highs and 5 new lows. The five day moving average of New Highs is 98 while the five day moving average of New Lows is 19 and the ten day moving average of Net Advancing is 896. The Net Advancing data indicates a bullish trend.The SPX gained 71.22 points during the week. The range for the week was 73.48 points, 5.79%. The four week RSI of the four indices (SPX, Dow, NASDAQ, and Russell 2000) is 70. Pullbacks often occur as this RSI reaches 80 and bounces near 20. This past week hardly requires a recap; it was an outrageously bullish week of historic proportions. But it may be interesting to note that the last time the total tick for the week was at 900,000 was the week ending April 29th; the market topped right after that.

The MO is very overbought but can stay there and the MSI is just heading into bull territory. Waiting for some sort of news this week. This cant be happening for no reason. 

Money continues to come out of bonds and dollar, expecting some sort of easing news soon.