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It was 'risk on' as money came out of the dollar and went back into equities and the metals.
The Fed begins its Operation Twist bond purchases tomorrow or so I hear.
Its all about Europe sovereign debt at the moment.
Gold is running on the inflation rails now and not on the risk adversity safe haven trade. That may change but for now it is what it is.
Thin volume 'risk on' rally as stocks faded into the close from the highs but kept some gains.
The markets are primarily eyeing the sovereign debt situation and discounting domestic results and economy, at least for now.
Although this could break out and keep going, I have held the thought that this is just a short squeeze within the context of a broad trading range from 1100 to 1220. It should be noted that the futures tend to be a little 'sloppy.' These moves up and down in a broad channel are what is known as a 'wash and rinse' or 'wax on, wax off.'
There is a potential triple top at 1215.
If the futures can break and hold 1230 then we might see a more sustained bull market leg, but I have trouble seeing that until the European debt situation is resolved.
However it is possible. And since the Fed begins its bond purchases to implement 'Operation Twist' this week we may see some new liquidity providing an impetus for stocks, and some perception management activity as well.
Be careful of the short side until the trend breaks.
Gold was strong overnight but was stepped on quite hard about 9 AM London time as is often the case. The east buys and the west sells.
Nothing has broken out yet. So we wait a bit and bide our time.
I am running some moderate gold bullion and a light silver addition on the ability to hold 32. A small hedge short broad stocks goes with it. No miners yet in the portfolio.
