A Few Changes But Nothing Of Note As U.S. Returns From A Long Holiday Weekend

In spite of a rising U.S. dollar, gold, perhaps in a corrective mode after a month of losses, made some headway today. In this case, corrective would also mean tempting to bargain hunters.

Regardless, the yellow metal was the only component of the precious metals complex to enjoy a healthy rise on the day.

We are in the land of “in spite of.” The dollar itself rose in spite of poor or stubbornly slow economic data. The Chicago PMI tumbled down and broke its crown in the report issued for October, showing what by any stretch of the imagination is a dangerous contraction.

It may not be accurate to say that as the Chicago numbers go, so goes the nation, but the Midwest report is important. The Chicago indicator shrank for the sixth time this year, which signals uncertainty more than catastrophe.

Pending home sales expanded slowly in October, which seems to be the monthly habit these days. Nevertheless, those sales did improve. The last two months of the year are notoriously tough on home sales. People don’t want to be moving around during the holidays, pure and simple – not the buyers and not the sellers.

The index is a forward-looking indicator based on contract signings; it has now increased year on year for fourteen consecutive months. October’s pending sales indeed were 3.9% above October 2014.

Depending on whether you’re a glass half full or glass half empty person, you might look for a silver lining or a dark cloud. Steadily rising home prices and a shortage of available homes cast their negative juju on the housing market. One way or another construction is not keeping pace with demand. If it’s because of normal demand, that’s great. If it’s because credit is still too tight for builders and prospective home buyers, that’s bad.

Lower crude oil prices and instability in the health care sector weighed on U.S. equities today. The latter pattern (in health care) is fairly common as end of year approaches.

Brent North Sea oil and U.S. West Texas Intermediate fell when news of a return to record pumping by Saudi-led OPEC producers was reported. That seemed to quash any thoughts about a surprise at the recent OPEC meeting, which some speculators believed would yield a change of strategy that would return OPEC to pushing prices up rather than trying to maintain higher market share.

Also weighing on stocks is the rapidly approaching Federal Reserve meeting on December 15^th. That worries exporters in the U.S. It has been a drag on sentiment for some time. we’ll be well to be rid of the anxiety associated with the first rate rise in a decade.

Finally, the immediate post-holiday start of the week shows a lot of people taking the morning off and leaving the investing and trading to the junior varsity a few hours longer.

The main thing the J.V. tries to accomplish? Don’t mess up. Thus, they play it conservatively.

Wishing you as always, good trading,