Wednesday, November 3, 2010
Traders View QE News as Neutral to Bullish for Stocks
Crude oil closed up $1.16 at $85.06 a barrel today. Prices closed nearer the session high today and hit a fresh six month high today. Prices also produced a bullish upside "breakout" from the recent sideways trading range. The bulls have gained fresh upside momentum.
Natural gas closed down 3.0 cents at $3.84 today. Prices closed near mid range today. The bears still have the solid overall near term technical advantage. However, technical odds are increasing that a market low is in place.
Gold futures closed down $16.90 at $1,340.00 today. Profit taking pressure and position evening ahead of the FOMC "QE" statement Wednesday afternoon was featured. The gold market did recover half of its losses in after hours trading following the QE announcement, which had a package that was at the high end of what the market expected. A weaker U.S. dollar index after the QE announcement also helped to lift gold up from lower price levels.
The U.S. dollar index closed down 38 points at 76.51 today. Prices closed near mid range today and did not a fresh contract and multi month low. The QE package announced by the Fed today was a bit larger than expected, which was dollar bearish. However, prices did close well off the daily low. Dollar index bears have the firm overall near term technical advantage and gained some fresh downside momentum today.
Why Diversification Doesn't Work