Word of the Day is Plummeted

Just gotta have a little fun today with these markets being so slow. Just when you think today just could be the day for more record highs in stocks and reach that 2000 milestone, something comes out of left field that takes everyone by surprise and that would be the drop in New Home Sales which PLUMMETED 8.1% last month. The real surprise was that May has a huge downward revision from 504,000 units to 442,000. Now that we are talking about late 2nd quarter numbers here, the economists are going to have to come up with a better excuse than the weather!

The housing data was after the unemployment claims released first thing this US morning. If it was not for the housing data, stocks just may have had a nice rally today because we had Chinese PMI released last night and that showed the best manufacturing number in 18 months to get stocks on to a happy start. To add fuel for the bulls Jobless Claims PLUMMETED through 300,000 to 284,00. This number is the best we have seen in 8 years. With these job numbers the rate on the 10 Year Note got a pop above 2.50% and traded as high as 2.52%. The government was quick to come out after the release and say that this claims number could be due to a seasonality because of auto plant shutdowns.

With this number, the speculation for next Fridays July non-farm payroll number begins. Let's keep an eye on the 10 Year Note and the US Dollar as well. As for the Dollar today, we still sit just below 81, with the Euro making a low in the European trading session just above 13435 then bouncing back and settling at 13465. The notable mover of the day was the British Pound trading through the 170 handle. Last evening, out of New Zealand we did get an interest rate hike and then a warning from the Bank of NZ that intervention in the currency could be in the future. This took the sails out of NZ dollar and in my opinion made traders a bit leery of taking the Aussie much higher, for the moment. I have been talking about the dollar index possibly going higher but at this moment the Aussie, NZD and CAD have been pretty resilient. More on that in my next post.

One more PLUMMET to mention and I even have a couple of charts. Before that I just want to acknowledge the busy day on Wall Street, with the Dow closing down 3 points and the S&P closing at another record high, up 1 point on the day @1988. With such spectacular movement in stocks today, Gold, you guessed it, PLUMMETED through $1300 today and traded as low as 1287. We currently are trading @ $1293. Here is a look at the daily chart

The thing that I did not like today about Gold is that you did not see a reversal of the losses especially after such poor housing data. After all, housing has been a big part of this so called recovery and now it seems to be deteriorating even with interest rates being near record lows for such a prolonged period of time. This bears watching guys and gals! I would have liked to see more buying from the 1290 area and that just hints of a test of the 1280 level next. To get a better picture of GOLD currently, I share with you a weekly chart with my trend lines drawn. A true chart artist, which I am not, would tell you that we have developed a megaphone pattern as seen here in the chart below

When this pattern resolves and breaks one of these lines, we will get our next directional move in the gold market. A break of 1280 to the downside and we could easily head down towards 1240, a break of 1330 and we could have a nice start to an upside rally. Seasonally Gold tends to start uptrending in the month of August. Don't go and bet the farm on upside in Gold just yet. Be patient and make a note of the levels to watch, that is all you should be doing right now. That's all I have today, hope you found it helpful and perhaps got a chuckle. If no chuckle then maybe this last view and last PLUMMET will do it.