Hmm ohh, one of those days

There are a few moves which don’t make much sense to me today, but after the run-up we’ve had a -0.5% doesn’t seem that painful.

The first wild swing which jumps out at me, is gold; but its true for silver and commodities in general today. How do I make sense of a 4% drop in gold? Trading was even halted for 10 seconds! One explanation might be that banks holding JGB have capital requirement issues, the recent volatility might be sending sellers to the gold teller. Goldman’s prediction of gold at 1200 didn’t help, but that’s been out there for a few days. Or it might be that Cyprus is coming under pressure to sell gold for it’s bailout, this I doubt is having any impact. $400 million sold into the market slowly couldn’t account for the slide we’ve seen.

Gold and 10 Year Bond Futures

And the 10yr bond futures are climbing, what’s up with that? It’s just rising, hanging out on an upswing. Something looks fishy to me. The VIX is effectively flat. So what’s going on here? JPG players are selling gold to buy the US 10 yr and option players don’t see much downside risk in the S&P? What about the weak sentiment numbers and lousy retail sales numbers? There’s a fair amount of risk out there.

Today is one of those, ‘hmm, ohhh’ days. My only expectation is that we’ll touch the 61.8% fib (1542 – 1592) on the S&P by close, but being one of those days… Who could say? Maybe she’ll ride into the close on the 76% which is where she’s at presently.