Many “risk-on” asset classes are soaring this morning as better than expected housing data and Obama’s stated confidence on striking a deal to avert the so-called “fiscal cliff” scenario is giving stock bulls a reason to start buying again.
The DEC 12 E-mini S&P 500 is up around 1.38% this morning, essentially moving straight up for two days in a row since finding a recent bottom below 1350. We have stated that 1350 might be a magnet or pivot level, and now the market is trading above this key level. Another very key level in this market is 1373, and this morning bulls pushed the market above this level as well.
We also notice that the precious metals complex is rallying with silver, copper and palladium leading the way up. Palladium is the strongest of the precious metals arena, trading up 2.54%. In the energy markets, crude oil and heating oil are rocketing upward with crude futures up more than $2 at +2.38% and heating oil up almost 8 cents at 2.54%.
The grains markets are rallying as a whole, but we think this is more because of outside market activity and oversold levels being corrected, rather than any major fundamental shift in grain market expectations. Oat futures are the strongest of the bunch, trading up 3.51%. Soybean futures have indeed found buyers below the key $14 level. Jan13 Soybeans got all the way down to the $13.70s and now have touched $14 level this morning. We look for $14 to be a solid support area going forward.