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Randoms: Is Gold This Year's Crude?


Commodities are rarely safety plays.

  • You know that Chase bank commercial where the wife walks in wearing a new dress and Frank Sinatra is crooning in the background? He insists they should use their miles for a vacation and she says they can't. "No honey," he says, "You can use miles for just about anything," only to see her strike a pose, hand on hip, and say "I know!"

  • Yeah, that would happen in this economy! The wife drains miles from the joint account to buy a dress and the husband is ecstatic? They should serialize that commercial as I would love to see part two when it sinks in that they're not going on vacation because she had a girl's day at Barney's.

  • Wanna see an S&P chart with everything? Here it is; the white line is the downtrend from 2007 and a 50% retracement of the entire decline (bearish). The red line is the uptrend from the lows that's rocked steady since March. Those two parallel lines on the far right are the trend channel between S&P 1083 and S&P 1120, where we've been hanging with Mr. Cooper since early November.

  • Technical analysis is a better context than catalyst but even so, there's a little something here for everyone. Boo will argue that the longer the trendline, the more potent it is. The bulls, with sticky support still below, will note the overbought condition is being worked off as a function of time rather than price. These levels are just that, levels, but they should remain on ye radar as we edge to year-end.

  • I continue to trade around some March puts in the S&P. Nothing massive, mind you; I've learned that when you don't commit 100% attention to your trading positions, you're at a natural disadvantage as your counter-party (if it's human) most certainly is.

  • You say holiday gifts? I say Hoofy and Boo Bobbleheads!

  • My recent NYU speech has nuggets of wisdom sprinkled throughout but the audio volume leaves a lot to be desired. Apologies on that as my chin evidently got in the way of the microphone.

  • Given gold is 7% from it's high thisquick, would another 13% officially usher in a bear market? I don't have a horse in that race but I do have three random thoughts, as discussed last week.
    • I've never seen commodities sustain themselves as a pure safety plays.

    • This year's gold reminds me of last year's oil.

    • While there is a 15-20% probability it eventually ticks at $3000, there is an equal to higher probability that it trades between $600-$800. All one man's humble opinion.

  • N-V-T-S NUTS! After reading Minyan Peter Atwater's fascination with numbers, which I admittedly enjoyed, I couldn't help but chuckle when I checked the tape at the end of a (long) day away from the fray to find the S&P low tick was 1101 and the high tick 1111.

  • Please do us a solid; if you've owned a BMW at any point in your life, please click here. Thankyoueversomuch.

  • On Friday, after the jobs data as the market was ripping higher, I wrote "One of the first things I learned on Wall Street was that rallies end on good news, not bad news. Market internals are buff and sentiment is snazzy--don't blink, it's also reactive--but keep that axiom tucked somewhere in the back of your crowded keppe."

  • It's entirely too early for either critter to exhale--see the S&P chart above for visual proof--but the reaction to news is always more important than the news itself.

  • Through that lens, I'm watching FedEx (FDX) and MMM (MMM) today, as well as their influence on the broader tape. That, the dollar (higher in early trade), the financials (Goldman (GS), Bank America (BAC)), market internals and big beta (bang for the buck performance anxiety plays) are on my Turnaround Tuesday radar.

  • As we had some server issues yesterday (sorry bout that), I wanted to toss the 2009 Festivus to Benefit Children's Education recap on ye radar; it was a rocking good time for a wonderful cause and words can't express the profound appreciation involved. On behalf of us all, I offer a heartfelt Ruby wink ;).

  • If you haven't already, join our Facebook page and follow us on Twitter.

  • Good luck and always remember, you're a Minyan!


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