Laboring Through The Elections

Gas under $3 a gallon. Unemployment under 6%. Stock market breaking records every day.
No wonder Obama is so unpopular.

We're wondering if the election results were already "baked in" to the markets today. The takeaway from the elections for the economy is fairly clear. Nothing will change the course of the mighty U.S.economy barring disaster of epic proportions. The equities markets gave a bit of endorsement to the election results but there was other news that is overriding the Republican sweep.

Private employers added 230K jobs in October, well more than estimated and the largest gain since June. That's according to ADP's National Employment Report, which casts a positive light on the labor front two days before the Labor Department's payrolls report.

"The report is strong enough to maintain the view that the labor market is recovering into the final quarter, and is likely to provide optimism among investors ahead of Friday's official government employment report," Andrew Wilkinson, chief market analyst at Interactive Brokers, was quoted as saying today.

At 4 o'clock in New York, gold is down a little over 2%, slightly off its lows for the day. Silver was battered down almost 4.5%. Ouch.

The other usual suspects have been rounded up for the sinking of gold.

The dollar found more room to strengthen, although that seems to be on the wings of a faltering monetary policy dance in Europe and the continued intrigue people are finding in Japan's huge bond buyback move.

The real story was real trading. Investors just don't like precious metals. Risk on is the watch-phrase of the period we're in right now and will be until the bull equities market runs into a stone wall. Gold may find buyers as it floats down toward $1100, buyers who will chance some money on a quick turnaround. But, as we know, buying dips in bear markets is very tricky and very risky.

Oil seems to have found some legs underneath it today, as a slower pace in the rise in inventories spooked a few bears and a rumor concerning a pipeline explosion rattled energy markets in general. Crude did, however, remain below $80. If you're thinking the fall in crude prices has been precipitous, think back to 2008-9 when oil plummeted from roughly $135 a barrel to $35 a barrel. Talk about Humpty-Dumpty.

A good question to ask ourselves regarding our current short side trade is: what possibly could make gold go up?

Wishing you as always, good trading,