Microsoft and McDonalds reported less than stellar earnings, and spooked the stock market investors after a big rally yesterday. We think this is not the start of a major correction, but a bump in the road on the way to 1500. Interestingly, not all commodities are down today. Sugar and cocoa are leading the way in the commodities markets today, both up almost 2%. Both markets have found initial strong buying right below their key support levels of $19 for sugar and $2,400 for cocoa.
Precious metals are all in the red today with Palladium leading the selling, trading down almost 4% today. Gold is approaching $1,700, and silver touched below $32 this morning. After an initial bullish jolt after QE3 was made official, these metals markets have not had the extended rally many were expecting.
Today, we focus on natural gas. Natural gas is the bull of the energy markets these days. Crude oil is actually down almost 2%, RBOB has breached yesterday’s low price, and heating oil is down almost 1%. Natural Gas is trading strongly above our key support level of $3.40. The next technical resistance level in our view is the $3.85 area. There is potential for natural gas to snap back in the short term as it is approaching overbought levels, but this could be very temporary.
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