Thursday Commodities & Currencies
Disclaimer: All charts and comments are intended for education and discussion purposes only. No investment recommendations are being offered. Please do your own research and take responsibility for all investment decisions that you make. Questions and comments related to this post are encouraged. | MON - Sector Strength | TUE - Interest Rates | WED - Market Breadth | THU - Commodities & Currencies | FRI - Market Sentiment | SAT - Bullish Percents | About | contact: HeadlineCharts@gmail.com |
Many market-timing blogs will be filled with comments about today's wild ride in the market. It does appear the capitulation finally occurred and that an intermediate low may have been touched. But I can't imagine that I have anything more to add than the other bloggers so I'll stick with the usual Thursday commodity review.
Many commodities and indexes moved lower over the past week. Weakening commodity prices is an early indication that the economy may be slowing again, although more time is needed to make that call. John Murphy mentioned that the markets have become highly correlated lately, and it is likely that some of this commodity selling is because investors need to raise cash to cover as the Yen surges and other investments collapse. The bottom line is that commodity prices are not currently supportive of the equity market.
The Yen is playing a huge roll in the markets at the moment as demand for Yen has swelled as positions unwind and Yen carry-trades are closed. I had read that the Yen had surged in price, but I had no idea it was to this extent.
The Australian and NewZealand Dollars have fallen in dotcom style over the past few days. These are high-yielding currencies that have been heavily dependent on high commodity prices and the global building boom. Is this an early sign that world growth is in trouble?
