Well, if you are a futures bull anyway. We keep telling you that’s where the action is. Last Thursday we gapped up 100, Friday another 50 and Monday another 50. Wow, what a market right? And where did we close a week ago Wednesday? 10,337. And where did we close yesterday after 200 points of futures gains? 10,452. So we LOST 80 points during real trading hours and gained 200 when no one was looking – yet no one is being arrested – go figure…
I already made my skeptical note to Members this morning as the pre-market action tacked on another 50-point gain that pretty much started at 3am on the dot as the Hang Seng threatened to fail 21,500, which would have been a serious breakdown on a triple test over 5 days. It still looks to me like the Hang Seng will be looking at a 10% correction in the very near future but the pump crowd aims to put off that day of reckoning for as long as possible.
The Nikkei, on the other hand, had their own gap up, back over our 10,200 target (we went long on EWJ again yesterday) but failed to hold it and closed at 10,177, up 1%. Once the Nikkei closed, the dollar was allowed to drop back to 89.5 Yen and the Euro was jammed up from $1.451 to $1.458 but that was nothing compared to the Pound, which went from $1.623 at 3:45 to $1.636 at 6:45 – a spectacular move that allowed copper to get back to $3.17 (up 1% from yesterday’s close) along with 1% gains in Silver ($17.50), Gold ($1,135) and Oil ($71.50) all of which made great futures shorts at those prices.
The dollar is being jammed down on whispers in Europe that the Fed will announce today that the US Economy is much improved BUT they have no intention of raising rates in the foreseeable future. This enables the burgeoning dollar carry-trade to continue and, as John Carney points out at Clusterstock, it allows the Fed to keep buying Mortgage Backed Securities from the Banks as fast as they can turn them over.