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Buzz & Banter

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What? You're still here? Haven't you heard there's a Holiday coming up? I feel you, my fellow Minyans. I'll be here until the bitter end too, I'm afraid, while practically everyone else gets a jump on the long weekend. Those people are slackers!

As the participants in the market's shooting match thin even further heading toward the weekend I wouldn't be surprised to see the prevailing bias take a more active role in the price movement. (Sure, I could have simply written: the market may go up into the weekend! But it's not as fancy as all that stuff about "prevailing bias" and "shooting matches").

Yesterday we talked about the appearance of an underlying bid in the market (financials excluded) and with the long-term indicators positive be on the lookout for some aggressiveness on the long side to rear its head. It's no secret the trade du jour continues to be the, mostly futures led, late afternoon pop.

A half hour ago the, ooh gross, domestic product growth for the second quarter was revised upward to 3.1% from 2.4%, most estimates were for a revision to 2.9%. Also initial unemployment claims came in at 394k.

Gold has pulled back a bit but remains, for now, above the breakout level (former resistance often acts as initial support) of 368. The relationship between gold prices, near a three-month high, and the dollar, near a four-month high versus the Euro, is unlikely to continue over a longer time period. Eventually, the probabilities favor just two outcomes: gold corrects as the dollar's counter-trend rally continues, or the dollar's primary downtrend will reassert itself as gold's breakout continues. The fact that silver and gold are now moving in tandem again is bullish near-term, but gold has yet to duplicate the new high silver established in July. In the meantime, if you are involved in gold or gold-related stocks, it might be worthwhile to examine your time frame and make a decision about your risk/reward parameters. I've written that gold could correct by nearly $50 dollars and remain in a longer-term uptrend. Important resistance is coming up in the 380 area.

Have a profitable day and I'll be back later.


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No positions in stocks mentioned.

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