Wednesday, December 10, 2008

Strange Rally, With Gold and Energy Up, Financials Down

For what it's worth, I'm short right now, as among other factors I am suspicious of a DJIA that is up 187 points largely behind strength in gold and the energy sectors.

Meanwhile, financials are in the red.

Will financials pull the broader market back down? Will commodities lift the market higher?

The more I think about it, the more I think we are moving closer to a deadlock and the more I like that SPX straddle trade...

5 comments:

Jeff Pietsch CFA said...

Take a look at the dollar.

Bill Luby said...

I know it is falling, but a drop of 0.5% isn't that big of a deal...

Kristianson said...

At least for a change dollar is getting weaker and equity market is down, and commodities are up. XL capital -50% today, I am sure putting some pressure on XLF.

Kristianson said...

China holding up well too, FXI is up 5% for the day. Money moving into emerging markets again :)

Anonymous said...

The March U.S. dollar index traded at a high of 89.06 on November twenty-first, the day the SPX 500 and other major stock market indexes rallied sharply from their 2008 lows. The U.S. dollar index closed at 86.29 yesterday and appears to be forming a bearish head-and-shoulders pattern. This is a good reason why February gold futures have increased from the November twenty-first low of $743 to yesterdays close of $809 per ounce.

DISCLAIMER: "VIX®" is a trademark of Chicago Board Options Exchange, Incorporated. Chicago Board Options Exchange, Incorporated is not affiliated with this website or this website's owner's or operators. CBOE assumes no responsibility for the accuracy or completeness or any other aspect of any content posted on this website by its operator or any third party. All content on this site is provided for informational and entertainment purposes only and is not intended as advice to buy or sell any securities. Stocks are difficult to trade; options are even harder. When it comes to VIX derivatives, don't fall into the trap of thinking that just because you can ride a horse, you can ride an alligator. Please do your own homework and accept full responsibility for any investment decisions you make. No content on this site can be used for commercial purposes without the prior written permission of the author. Copyright © 2007-2023 Bill Luby. All rights reserved.
 
Web Analytics