Tuesday, September 8, 2009

Early Morning Calls: Stocks Up, Gold Up, US $ down

Many market sectors are continuing their extended moves, with US stocks calling higher early Tuesday morning due to the G-20 stimulus pledge. On Labor Day Monday, most world stocks were up 1%-1.5%. Our stock indicators remain long http://z-trader.blogspot.com/2009/09/stocks-all-systems-go.html .

This is causing gold to extend its push higher -- and is newsworthy, with gold currently trading hands at more than $1000/oz ($1007 in early morning trade, in the Dec futures contract). Gold has the potential to be a major mover today, as stops above $1000 are taken out. On the other hand, some traders will take profits at the round $1000 level. The US dollar is lower.

At some point, the fundamentals say that we may have to "pay the piper" -- but for now, traders need to be neutral or following these trends. Some traders may even be "dipping their toes in" and taking small contrarian positions -- but we typically follow extended moves. The global economy has hopefully averted more drastic moves in the financial markets, but only time will tell.

Quick follow-ups:
  • After running to multi-year highs, the Sugar market is taking a breather and is down significantly in just a few days. Traders should look for a base before accumulating long positions again. http://z-trader.blogspot.com/2009/08/sugar-market.html
  • Soon after our pre-market followup on Rambus last Friday, rumors of Samsung buying RMBS -- or at least in serious talks -- caused the stock to pop back up towards its upper range. We have no information besides the rumors swirling around. However, we believe that (1) the court delay under "weird" circumstances, combined with (2) a "big volume day" (share volume was more than four times the recent average volume; options volume was more than three times normal!) -- means that something could be in the works.
  • Rambus is currently trading around $19 in Germany, after closing at 17.75 last Friday and 15.93 on Thursday. http://z-trader.blogspot.com/2009/09/rmbs-update.html

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