Silver falls as investors shift into equities

U.S. factory orders rose in February, boosted by a pickup in demand for motor vehicles and commercial aircraft.  Overall, the sentiment for the U.S. economy seems to be very strong, and therefore we are noticing that any dips in the stock indices (S&P 500, Dow, Nasdaq) have been aggressively bought.

Today, the JUN13 E-mini S&P 500 is at another high for 2013, trading up 11.25 pts to 1567.25.  We believe this market might be headed to around 1580, then it might consolidate or even pull back. We have noted that our key pivot level for this market is 1550. The market is now well above that level, so we continue to hold a very bullish view, always aware of how any key fundamental factors might change the landscape.

Natural gas is down 1.6% today, making it an interesting market to watch. Natural gas has rallied from the low $3s all the way to $4 this year, and we believe natural gas is still in a bullish technical posture. We believe the $3.75-$3.80 area might serve as solid support for another potential run higher.

We focus more on the silver market today. Silver has hit a very key $27.50 price point, and we believe this is an indication of the bearish environment for silver. Our main resistance level is $30, and our next key target lower is $25. It seems that as the U.S. equity markets rise, more investors are liquidating their precious metals holdings and perhaps shifting into the “great rotation” into equities.

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About the Author
Anthony Lazzara

Anthony Lazzara, CEO of Newport Beach, Calif., commodities investment firm Lido Isle Advisors, spent 10 years as a trader and floor broker at the Chicago Board of Trade and Chicago Mercantile Exchange. Anthony has significant experience in the energy, fixed income, and equity futures markets. After being a long-time independent futures trader, Anthony saw a tremendous opportunity to educate investors on how to invest in professional traders. Anthony is now focused on his duty as CEO of Lido Isle Advisors.

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