Some stuff to ponder while you try to whittle away the remaining time before the Globex opens...
Let's start with some "softs". Take a look at cocoa. About 50% of the world's cocoa production comes from Ivory Coast. IC is definitely not a place I would want to spend a lot of time these days:
couple that with this:
And now look at the chart. After a steep selloff, it looks to be headed much higher. This does not please The Turd. Mrs. Ferguson and I own a couple of self-serve, frozen yogurt stores and a rising cocoa price definitely impacts our bottom line. We will be forced to raise prices (again). As you can see, events in faraway places do, in fact, affect your pocketbook.
At any rate, an important fundamental that I haven't mentioned yet is the potential new, significant demand from Japan. Not a lot of interest in glow-in-the-dark steaks these days. It might simplify the task of grilling at night but eating one will make cholesterol the least of your worries.
Gold is the barometer. Everything else mainly flies "under the radar". As you know from discussing current events with friends and family, very few folks have any idea of just how drastically dollar-denominated commodities have been rising in price since the advent of QE back in 2009. The price of gold is about the only item that most folks ever hear about on the nightly news or CNBS. So, to support the illusion of "under control inflation", the gold price must be suppressed.
Look at the action in gold since the announcement of QE2 back in November. The CRB is up about 20% but gold is flat. Not that is hasn't tried to moved up, it just hasn't been allowed to. Note the severity and speed of the hammerdown each time gold taps the 1440 area. Soon, there will only be two scenarios that can play out:
1) all commodities correct and collapse, thereby easing the UPward pressure on gold and it rolls over, too. (unlikely)
2) The buying pressure becomes too great for even The Cartel to contain and gold finally forces its way through 1440. The Forces of Evil will be forced to retreat about 10% higher, near 1600. Sound familiar?
9:15pm EDT UPDATE:
A strong opening across the board this evening.
Gold is 1432 and silver is 38.09. WOW!
Most significantly, May crude is at 108.65, well clear of the intraday highs of 3/7 at 108.20. Its hard to tell, at this point, where crude may run into technical resistance. It looks to me like it has room to run all the way through 110 toward 110.25 but who can say for sure? When the crude is market is being driven by geo-political factors, the charts and the fundos take a back seat.
As long as crude stays UP overnight, you can be confident that the PMs will catch a consistent bid. Silver is rapidly closing in on the intraday, pre-margin hike highs set on 3/24 at 38.18. Remember what The Wicked Witch said last week...The Cartel may surprise us, dispense with the double-top painting and allow silver to run up through 39 and approach 40 this week. Let's watch for that and stay nimble if it happens. I now have a last of 38.13 so we may know by tomorrow morning (U.S.) if Blythe and Ruprecht have decided to stand down for the time being.
Have a great evening! TF