Aussie Crushed by weak GDP but Gold gets its mojo back amid commodity rally

December 5, 2013

US equities are fighting back from weakness since the Beige book was released a few hours back and which lifted stocks off their lows. The Fed said that the economy continued to expand at a “modest to moderate pace”.

With 30 minutes to go before the close the Dow Jones is recovery still and is down 0.19% to 15,884, the Nasdaq is flat to 4,038 and the S&P 500 is off 3 points to 1,792. Earlier in the night new home sales were stronger than expected in October but the ISM non-manufacturing PMI printed 53,9 versus 55 expected.

I’m still short the S&P 500 which as you can see in the chart below found support at my fast moving average overnight which is usual for my method.

My target is 1756 once the slow moving average breaks or if it breaks. But my method suggests it should – so I stay short.

European markets were under pressure and missed the US recovery. The FTSE fell 0.34% to 6,510, the DAX dropped 0.89%, the CAC fell 0.56% while stocks in Madrid fell 0.29% and 0.67% respectively.

On overnight trade on the ASX the SPI 200 December contract  has rallied off its lows as US markets have done likewise and at 7.32 AEDT is  only off 2 points from yesterday’s solid recovery The high in overnight trade was 5285 but the market sits at 5274 bid this morning.

On Global FX markets the Aussie dollar got poleaxed yesterday by the miss on GDP dropping below 89 cents briefly before recovering a little to 0.9024 this morning. You can see in my linked page at Business Insider this morning that the Head and Shoulders is still playing out and my longs are nothing if not wrong. We’ll see how the Aussie plays out over the next few days but there are plenty of catalysts still coming down the pipe on the data front. On the day the hourly’s suggest a little strength back toward 0.9050/55 maybe 65.

In other FX markets Euro is back near 1.36 at 1.3593 but it and GBP are hardly moved on the day with sterling at 1.6382. USDJPY is down again off a high of 102.83 at 102.10.

Gold rocketed higher overnight up more than $20 oz – perhaps it’s all the Bitcoin buyers converting to the “real” stuff. This morning gold sits at $1,246 for a rise of 2.03%. Gold’s chart is scarily like the Aussie head and shoulders pattern so even though I’m long I’m not in love with this position.

Silver has rallied as well 3.83% to sit at $19.74 oz while copper surged a massive 6 cents a pound or 1.81% to $3.26 lb. Nymex crude was also higher rising 1.05% to $97.05 Bbl after there was a huge draw on inventories relative to market expectations. Over in the Ags pit corn was up 0.83%, wheat fell 0.99% and soybeans rose 0.74%.

On the data front over the next 24 hours we see South Korean GDP, Australian trade data and then tonight there is a Bank Of England interest rate decision which is a 5 star event for markets together with the ECB’s decision, statement and press conference. In the US the release of Q3 GDP will be closely watched as will jobless claims and personal consumption expenditures.

Have a great day and good hunting

Greg

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