Premarket Take 9/8/09

I hope everyone got some good rest this weekend because we are starting the fall trading season fast and furious this morning with the dollar getting crushed.  The macro conveyor belt is back in motion and the correlations which seemed to be coming undone have fused back together.

Let’s start with the US dollar.  The $EURUSD and $AUDUSD are both in full breakout mode, breaking yearly highs.  The $USDCAD is not far behind, still sitting at support.  I don’t really care why the dollar is getting crushed, just that it’s happening.

In commodities, crude is back around 71 this morning on the dollar weakness which puts in back at last Tuesday’s highs.  67 to 75 is the range now, a break in either direction could lead to more momentum, until then I am staying away.  Gold is above the 1000 mark trading around 1005.  The momentum players are coming out of the woodwork and you can bet they make a push for all time highs this week.  There are many pieces to this puzzle, including the possibility of China and the IMF flooding the market with gold reserves again.  Silver is surging along with gold up around 16.75.  Copper is also surging and should make a run this week at new yearly highs.  Of all the commodities I see copper as the most linked to the Chinese equity markets, watch that closely.

Equities have recaptured last Tuesday’s highs, if you bought on the dip last Tuesday morning, your nuts may be sore, but your wallet isn’t an lighter.  Of the sectors, $XME, $GDX, and $OIH are leading premarket.  I am kicking myself for not adding a gold miner to the portfolio last week when many came past my screens.  I have loose rules as to how many closely correlated positions I will take on the long or short side, but right now the trade is long gold, and I should have more exposure.  Hopefully gold will pull back along with the miners and silver, giving me another chance to load up.

I’m stoked for this week, the blood is pumping through my veins and I can feel my heart racing, this is why I love the markets.

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