U.S Stocks Rally Following Mid-Term Election Results

Investors and market participants seem unfazed while bidding the U.S. equities up substantially following the midterm elections which resulted in the Democratic Party now controlling the House of Representatives. Although the Senate remains firmly in control by the Republicans, yesterday’s election gave Democrats the needed majority to control the House of Representatives.

With one hour left in trading, the Dow Jones Industrial Average has barreled back through 26,000 and is currently up 464 points, +1.84%, to reach 26,100. The S&P 500 is also moving strongly to the upside with gains of 1.75% on the day. However, it is the NASDAQ composite that is exhibiting the most substantial gains today. Gains are currently up over 2.2%, with a net gain of 163 points, taking that index to 7,556.11.

The only financial instrument to move lower on the day based on the elections was the U.S. dollar. The dollar index is currently down a third of a percent and fixed at 95.825. The entire precious metals complex is benefiting from dollar weakness today.

The precious metals complex is trading higher across the board, and although the precious metals are well off of earlier intraday highs, they are still holding onto respectable gains.

By far the greatest percentage gain today can be seen in palladium which continues to move closer and closer to parity with gold. Palladium futures are currently up $25.50, which is a net gain of 2.33%, taking an ounce of palladium to $1,120.80.

Gold is trading higher today but has the smallest percentage gains on the day when compared to the other precious metals. The most active December Comex futures contract is currently trading up by $2.10 and fixed at $1,228.40. Today’s gains in palladium take current pricing within striking distance of parity, with only $108 separating the two metals.

Technically Speaking

Our technical studies indicate that gold has support at $1,221.70, the 100-day moving average, and at $1,218 which is the 0.618% retracement. We see current resistance at $1,246.80 which is the 50% retracement, with major resistance at $1,272 per ounce which represents the 200-day moving average.

Although palladium has traded nominally higher than current pricing, a close at the current levels would equal the highest closing price on record. A move above $1,135 per ounce would put that precious metal in uncharted territory and a new all-time record high. 0Major support for palladium occurs at $1,060 per ounce, which corresponds to the 0.23% retracement. Because the precious metal is at an all-time record high current pricing defines resistance.

Wishing as always, good trading,