Friday September 20, 2013 08:49
The trade took some off the table, as it reassesses whether the Tuesday move was a consequence of a short squeeze or a more convicted bullish impulse leg. Traders that took the long trade on the Fed’s inaction should have been stopped out at $1,355. The market will continue to find support against the backdrop of the debt negotiations and remain choppy in the near term. The $1,337-$1,355 points should act as a range today, with entry into the long side a consideration on a break above $1,357. The Fed, I have and continue to believe, will not move this year. The short term is focused on the geniuses in Washington and their brinkmanship on the debt ceiling issue. I have to at least bet on the side that they learned their lesson in 2011 and won’t push this to the 11th hour, but you cannot be aggressively short on this logical assumption. From here the markets will respond to continued demand for physical, which is waning, and more historical measures such as dollar valuation. The times of a one way street are behind us.