Orders for U.S. durable goods excluding transportation equipment climbed in January by the most in a year. This is a key impetus this morning for the rebound in U.S. equities, with the MAR13 E-mini S&P 500 futures trading back up above 1500. This morning, the S&Ps are up a good 12 points, hitting a high of 1506. The Russell 2000 is actually the biggest mover in the equity index space today, trading up 1.32%. Interestingly, the 10- and 30-year U.S. bond are also up this morning, still perhaps baking in a risk premium based on the political situation in Italy and the sequester situation in United States.
In the precious metals complex, gold, silver, and platinum are all slightly down today as the equity markets rally. We believe gold and silver continue to be in bearish-neutral mode, and think that with the recent volatility expansion in gold, we may be in for some sideways trade in the short-term.
While coffee futures are below our key level of $1.50, we believe this market may be forming a bottom base at these levels of the low $1.40s. We believe coffee could trade in a bullish way going forward and approach the $1.50 level once again.
We focus more on Natural Gas this morning. It seems as though the market is anticipating a big storage withdrawal shown by tomorrow’s data release. Technically, we notice a runaway bull gap in natural gas on Monday. The market opened in the high $3.30s and never looked back, and today it is the biggest gainer on the commodities board, trading up $.09 to $3.55. We believe the key pivot level for APR13 Nat. Gas is $3.44. As long as this market stays above this level, we are very bullish. Our next key upside target is $3.67.
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