StockTwits Market Preview 6/10/09

• kileyay
• June 10th, 2009

Overseas

Futures are up this morning, following strength overseas.

Gains in Asia were led by oil and metal stocks as commodity prices extended their rally. Japan’s Nikkei 225 saw a new eight-month high, closing up 2.1%. Hong Kong’s Hang Seng Index added 4%, and South Korea’s Kospi Composite gained 3.1%.

European markets also pushed broadly higher on the backs of basic resource and oil stocks. London’s FTSE 100 Index is up 2%, Frankfurt’s DAX up 2.33%, and Paris’ CAC-40 Index is 1.9% higher.

Commodities

Oil prices climbed to highs not seen since October of last year. WTI crude is up above $71 per barrel. U.S. oil inventories data is due out from the EIA at 9:30 this morning.

Non-ferrous metals are making a run at fresh annual highs. Gold is up almost $10 and silver over a quarter so far today.

The Dollar

The dollar remains a huge force for commodity moves in either direction, especially those of crude-oil and precious metals. Commodities are riding high on a sharp rise in investment demand and a weaker U.S. dollar.

Remember, it was the combination of high demand for oil and a weak dollar that caused the spike in crude prices to nearly $150 per barrel last year. But stand ready for a correction in buoyant commodities if there is bearish news on the global economy.

This morning, the dollar looks strong against the yen but fell against the euro and pound.

Technicals

Technicals remain bullish. Sell offs have been orderly on light volume. The VIX retreated again yesterday after piercing 30 on Monday. It’s set to continue its year-to-date pattern of decline.

Major indices are above the 10, 20, and 50 day moving averages. The 5 day moving averages on the Nasdaq and S&P 500 are flattening out around the level of Monday’s low. Watch for support there.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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