With the U.S. equity markets closed for the Martin Luther King, Jr. holiday, the futures markets that are open are quiet. However, the MAR13 E-mini S&P 500 futures are indeed trading today, and they continue their bullish tone, trading up 3 points to 1482. The MAR13 E-mini Nasdaq is also trading up 5 points to 2738. We continue to believe the Nasdaq will approach our first upside target of 2900, possibly in Q1. The equity markets seem very bullish to us. Forthcoming U.S. economic data, such as key jobs and housing numbers will be important in the potential continuation of this trend.
The U.S. bond market continues to be in bearish to neutral mode, as the MAR13 US 10-year note is trading down 6.5 ticks today to 131’05. We believe the next major move for the US bond market will be to the downside, especially if the economic data coming out of the U.S. continues to be positive. Our next major downside target for the 30-year bond futures is 141, but if things really start to heat up with an equity rally, we believe the bonds could go much lower than that.
Crude oil has slowed down its geo-political induced rally from $86. In light holiday trade, crude is trading down $.41, now at $95.15. The markets can stay irrational longer than its participants can stay solvent. Thus the crude market feels like it could try to crush the shorts and rally a bit higher, even though there seems to be a fundamental consensus that supplies are actually plentiful and thus “should” make the market go down.
We focus more on the metals markets today, specifically platinum. Platinum has had a sharp rally to start of 2013, trading from $1,520 all the way up to $1,700. It's 2012 highs are at around $1,740. Today, after retracing a small amount of the rally last week, APR 13 platinum futures are trading up $5.60 to $1,679. We believe platinum could be the surprise market of 2013, as we detect it could rally much more from these levels.
We believe platinum will approach and then break 2012 highs, and possibly trade up to $1,900 by the summer. ”Ideas that the 2013 annual platinum deficit will at least equal the deficit from 2012, an improving demand outlook for 2013 and the potential for a major supply disruption early this year are all factors which supported the recent surge higher,” Hightower said (of the Hightower Report). With everyone focusing on gold and silver as the main precious metals to watch, we wouldn’t be surprised to see people start to jump on the platinum bandwagon.
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