The Market Equivalent Of The Classic Flick Jaws

“Just when you thought it was safe to go back in the water…” That was the famous advertising slogan for the classic sea behemoth mega hit, Jaws.

Slightly modified, we have to put that in the form of a question today. Is it safe to jump back into the markets?

Well, the markets in New York held yesterday’s gains quite nicely and then added some extra padding. The Dow is up 1.00% in late afternoon trading. The S&P 500 is up 1.75%. NASDAQ did best of all three indexes, reeling in a 2.30% gain thus far.

Goldman Sachs and Apple were the biggest locomotives of the upward swing. American Express, even though it hit/beat earnings predictions, lost 11.00% on the day. It seems a mystery, but it might be a good buy. Look for follow through direction.

Apple jumped 5%+ after Minneapolis-based Piper Jaffray recommended investors buy shares ahead of next week's earnings report, asserting the stock could jump 50 percent by the presumed iPhone 7 launch in September. Apple is well off its 52-week low and has quietly climbed back over $100 per share.

Asia also recovered strongly today. The Tokyo Nikkei surged up 6.00%.Europe was up on comments hinting at more rate cutting by the European Central Bank. Some critics say that the ECB is out of ammo, though and can have little effect on market movements. Yet, sentiment is always an important factor in the direction of equity trading.

But the big influence on equities today was the streaking price rise in oil.

Although it is off its highs West Texas Crude in late afternoon is still trading up 8.50% on the day, a pop heard round the world.

The world benchmark Brent North Sea oil is hanging onto its gains of over 9.00%.

Both crudes pushed back into the $32 per barrel range. We hope this will bring stabilization and fairer pricing.

Gold and silver declined somewhat, but interestingly enough, the fall was due to strength in the U.S. dollar. Regular trading held up its end of the bargain. One would have thought the safe haven play was off on what has been a considerably strong risk-on day.

Gold and silver are each down about 1/3rd of a percent.

However, over in the realm of another safe-haven play, bond yields were up, pushing face prices down. So, bonds were seen as a less desirable instrument for safety or other purposes.

The euro and yen were down significantly against the greenback. The Swiss franc still seems headed toward parity value with the dollar.

We are looking at currency trade as one of the cutting edge fundamental oscillations in the next few weeks. There is a lot of pushing and pulling between the major regions on currency. People are airing the age-old misconception that a cheaper currency is actually good for a non-developing country.

It is that notion we believe that is hurting China across the board. Cheap money requires more and more credit and that credit has a higher price.

Wishing you as always, good trading,