US Holiday Contributes to Over Done Selling, Gold Bounces to 1,195

If everyone is digesting their turkey dinner, watching the third football game of the day… then no one is going to be trading.
If no one is trading, and there’s a hint of bad news, the bears can really smack these markets lower.
It 930 PM CST and I just checked the computer. I am sure I am not the only individual who did the same.

The Yen is at a 14 year high against the dollar and the Japanese Finance Minister is going to talk about currency moves over the next few days to address this issue.
The Nikkie is down about 2.8 percent. A ripple through the Asian markets.

And Surprise, a new high in the Gold at 1,195.00, just 5 bucks away from the 1,200 level. Gold had a quick 7 buck break in the face of that new high, on profit taking, or lack of follow through to the round number at 1,200.
I am guessing sometime tonight we will get that print out. If not tonight, then tomorrow. Its too tempting a target, plus there are likely a lot of stops above that level, which traders will be gunning for. Hitting those stops will cause a brief, violent pop, followed by a move lower after the short have puked their losing positions.
Professionals will be there to sell the new highs, take the risk, and then have a quick, sizable profit as the market goes back to equilibrium, after the brief buying frenzy.

The ripple moved to the US futures market, with DJZ looking at a 250 point crack back off it session high at 10467 down to 10,222. We have bounced 50 points off of those lows so far, no doubt due to the fact there are only about 7 people trading yet, and tomorrow, many individuals we also be staying away from trade in an extended holiday.

Believe it or not, the markets will be open on Friday, and in fact, I suggest not trading today. The lack of liquidity will make the moves, in a word, STUPID.
In the SPZ, we have had a 25 handle range so far, with a high at 1111.25 and a low at 1086.65. Again, liquidity issues make it hard to really look at these numbers with anything other than suspicion.

In a few hours I will post the support levels I like on the way down for all of these markets, but that will take some time on my chart book. Pullbacks after rallies like this are to be expected and even welcomed as trading opportunities for shorter term trades.

In the grains, we had even more of a sell off, followed by a recovery after the longs were done puking all over their shoes.
Corn is down 6 cents at 385, wheat is down 11 cents at 539, after trading down to 530 and then bouncing back.
Jan beans broke from 1047 all the way down to 1026 1/4 before rallying back to the 1040 level, which is down 15 cents from Wednesday’s settle at 1055. 1040 is the computer session high so far, but it looks like the selling was over done on panic and no liquidity.
We could very easily trade back to unchanged in all of these markets as people gauge the significance of the Yen’s new highs, and the potential impact of a bank liquidity issue in Dubai in the light of day, instead of after a day of celebration.

There will always be some unexpected development or story to fuel short term gyrations in the market.
Is the Yen Issue and the Dubai Bank Issue big enough to really do damage to these markets?
And if so, shouldn’t we all be thankful that such a correction will start from new recent highs, rather than the old March lows?

Enjoy what’s left of your Turkey Day.

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