U.S. Stocks Close Higher on Light Volume
James Hyerczyk from ForexHound.com at 10/12/09
U.S. financial futures markets traded in tight, narrow ranges today with very little movement following the opening. Today’s U.S. bank holiday and the lack of fresh economic news kept many big players on the sidelines.
Activity should pick up tomorrow when normal trading resumes and traders face a multitude of economic reports. Early in the trading session the latest U.S. Retail Sales Report will be released. A few hours later, traders will have a chance to react to Business Inventories. Finally, the FOMC will release the minutes from its latest meeting during the afternoon.
Equity markets rose today in the pre-market and stayed inside a range throughout the day. Traders continue to remain bullish about equity prices and optimistic about earnings reports. Much for the recent rally has come on the heels of strength in Europe and Asia. Traders should be careful about buying strength as the Dow and S&P approach milestone prices such as 10,000 and 1,000 respectively.
Treasury futures finished higher on extremely light volume. With banks closed because of the holiday, there was no one in the way to stop the rally. Late last week the trend in T-Bonds and T-Notes turned down after Fed Chairman Bernanke talked about a tighter monetary policy once the economy began to show signs of recovery. In addition, a Treasury auction late in the week was poorly received. Look for the downtrend to resume tomorrow once trading gets back to normal, but watch the retail sales report for any surprises.
The U.S. Dollar finished weaker against most currencies. Demand for higher risk drove up the December Euro and December Canadian Dollar. Weak fundamentals continued to pressure the December British Pound. Confusion from comments by Japanese government officials caused a sideways trade.
December Gold remained strong. The weaker Dollar provided all of today’s support. Some traders are reluctant to chase gold at current levels but may have no choice if the Dollar continues to break. There is some concern that gold is forming a bubble because of its recent rapid rise and how far it has rallied relative to the other metals.
December Crude Oil posted a strong gain, buoyed by the weaker Dollar and stronger demand for higher risk assets. Crude oil also got a boost because of last week’s report indicating better global demand as the world recovers from the recession.