Nov 19, 2012
It all makes perfect sense. S&P 500 futures are 33 points off Friday’s lows (Boehner’s ‘constructive chatter’ and Fiscal Cliff is fixed), EURUSD is rallying decently (Greece is fixed), and commodities in general have gone vertical. Gold is back above $1730 but its Silver and Oil (tensions rising – despite cease-fire?) that is running the high-beta pump this morning. WTI is almost 4% higher than Friday’s lows up near $89. The highly correlated nature of everything is perhaps merely sympomatic of a low volume week ahead and short-term oversold conditions – we suspect little is really resolved in any of these three ‘event risks’ and the same real-money anxious investors will use strength to reduce exposure further – since remember, if the S&P 500 is anywhere near its highs by year-end, there will be no fiscal cliff resolution.