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December 13, 2006

Net Zero

Today's late post comes compliments of the beautiful weather here in Atlanta. After watching half of today's equity session and uncharacteristically popping off a couple of day trades... believe it or not on the long side... the temptation to be outdoors was too great, so I headed to a friend's place to assist him with some projects. It seems I didn't miss much. Equities drifted higher from the point of my departure and closed flat for the day. Not at all bad for bears, however, considering the gap up on the open was solidly and immediately reversed.

Precious metals overcame one percent losses in the early going to also close flat. This action induced the second consecutive upward reversal day for miners, raising the chances for a follow-thru breakout. Especially encouraging is the fact that metals and miners showed strength in the face of a solid rally in the dollar. Either metals traders have got something wrong, or they are signaling that the last few days of rallying in the dollar is just a temporary phenomenon.

Tomorrow we receive another faux inflation number from the Labor Department. If metals are indeed ready for a run, this report could provide a catalyst or at least give us a clue as to the validity of the rally from October.

Disclosure: None


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