A More Complete Picture Of US And EU Strengths As Oil Rebounds

If you look closely at the manufacturing data released today by the U.S. Department of Commerce, you’ll quickly see that the worst of the industrial slump is over or almost over.

Non-defense capital goods (excluding aircraft), a crucial measure of business confidence and spending plans, slipped a mere 0.1% instead of the 0.3 percent drop reported last month (August).

The U.S. dollar saw this news as an opportunity and rallied. The strong greenback didn’t hinder crude oil’s rise of 3.5% today, although one has to wonder if markets just thought oil was oversold and due for a mini-rally.

Since more macro fundamentals haven’t changed it’s hard to draw any other conclusion. There is too much oil being produced. Storage tanks are brimming with oil. Demand is still only fair to middling.

Gold had no such luck today. The dollar dragged it down even further than regular trading did. At 3:30 in New York, we are looking at gold off by about 1.4% and looking to trip some support triggers.

Other components of the precious metals complex are also off today, following gold’s big lead. Silver is off 9/10ths of a percent.

Apparently, precious metals traders are still zeroed in on the Fed and what investors are seeing as a much higher probability interest rates will be raised in mid December.

The hotter energy prices convincingly helped U.S. equities today. The Dow was up the most on crude’s jump. The S&P 500 profited as well, and seems as if it might push beyond former resistance.

October auto sales soared upward from 16.6 million a year ago, Autodata said. That spurt is also helpful to the general equities outlook.

However, we should remember the old adage: Blessed are those who expect nothing for they shall not be disappointed.

Up next? Comments from central bank policymakers tomorrow (Wednesday). Statements or speeches from Chair Janet Yellen, Vice Chair Stanley Fischer and New York Fed President William Dudley will be scrutinized for any interest rate guidance

Wishing you as always, good trading,