The domestic stock markets have been looking weaker and weaker as they head into the ultra important Black Friday and holiday shopping season. Tuesday’s weak open as the result of Turkey shooting down a Russian fighter jet is the confirmation needed to issue a sell signal in the Dow Jones Industrial Average (DJIA) futures. The Nasdaq 100, S&P 500 and DJIA are all exhibiting the same pattern but the textbook example lies in the Dow futures.
The sugar market has been one of the few bright spots in the commodity futures. Since most commodity exposure is long only and this market has rallied between 45%-50% since bottoming in late August it has become a commodity darling. There are three primary reasons for the recent rally. Of these, only one is structural. We feel the transitory nature of the other two will conspire to bring prices back down as the #11 sugar futures tighten their link to domestic prices in the primary growing regions.
We’ve been bearish on on gold, platinum, copper and silver the entire fall. So far, so good. However, as we approach the lows for the year in these markets, it seems a prudent time to evaluate our positions, specifically, the silver futures market.