Thursday, March 31, 2011

What's This? Markets Lower? Metals Gain

Not much to say about today's action except that most of the moving was done in the final half hour of the session, probably due to some not wanting to be out in front of Friday's non-farm payroll data (expectations: +210,000).

Those running scared at the end of day can be excused for their skittishness as the markets posted their best first quarter gains since 1998, near the height of the tech boom.

Uncanny as that may seem, stocks are pretty much in a very overbought condition, by any standard, though it light of global conditions, it's extreme. That makes Friday a key date, not only because its the first day of the month, but also the first trading day of a new quarter. Recent history provides that first days of months over the past 18 months have been powerful uptrend days, though very few have also had jobs data tied to them as well.

That sets up interesting cross-currents for tomorrow, so rather than speculate, it may be wise to just let the chips fly - and fall - where they may.

However, with quarterly gains now locked in place, the wise guys might feel compelled to go short through tax day, as the markets still have not regained their February 18 highs. The truncated correction may begin to assert itself again, as might normal economic forces, though these can always be offset by the Fed handing fresh greenbacks to the Primary Dealers, sending stocks ever higher.

All that market noise might just render Friday a good day to start a three-day weekend.

Dow 12,319.73, -30.88 (0.25%)
NASDAQ 2,781.07, +4.28 (0.15%)
S&P 500 1,325.83, +2.43 (0.18%)
NYSE Composite 8,404.98, +11.71 (0.14%)

Advancing issues finished ahead of decliners again, 3779-2732. New highs on the NASDAQ totaled 195, with 33 new lows. On the NYSE, there were 236 new highs, 15 new lows. Again, selective, but nonetheless, extreme. Volume put in another decent day, but still was nothing to get excited about.

NASDAQ Volume 1,920,940,625
NYSE Volume 4,253,768,000

West Texas Intermediate on the NYMEX posted a massive gain of $2.45, closing at $106.72, a 30-month high. Precious metals had a solid day, with gold up $15.10, to $1,438.90 and silver up 38 cents, to $37.89. Both are within a whisker of multi-year or all-time highs. April could be the month that gold finally rockets through resistance and goes ballistic, though the betting is that silver will outpace it. By the end of the month we could be seeing gold at $1520 and silver over $44 per ounce.

...and then, there's this brilliant opinion from an Irishman abroad:

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