Morning Market Thoughts: Elections and McDonalds
Uncertainty reigns supreme as the Pennsylvania presidential primary wraps up today. The media is focused on the results as this may be a pivotal point in the emergence of a clear democratic candidate.
Republican candidate Mc Cain is toiling quietly out of the spotlight while the democratic candidates are pulling out all the stops with Professional Wrestling tie-ins and other MTV style promotions.
The stock index markets HATE political uncertainty, history shows that it really doesn’t matter who wins the election, a clear winner and finality is what the market craves to jump back into the inherent long term upward drift. Our DJIA E-mini YM channel 12766-12866 held yesterday despite a brief test of the lower line.
McDonalds
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PowerRating), a DJIA component, has experienced a sharp sell off of over 2 points in the last 45 minutes which is causing a pull back in the DJIA as this is being written. Remember, I suggest staying FLAT in the DJIA YM channel.
Oil hit another all time high this morning to 118.05. The ripping trend continues, using any and all reasons for justification. Today it’s been blamed on a Nigerian supply disruption and a United Kingdom workers strike. Those of you who utilize the Point and Figure charting method know that P&F is projecting a near term target high of 127. I don’t believe oil will make it to 127 prior to a major sell off, but I am remaining out of this market for now. It is very uncertain, I will advise a suggested entry criteria when it becomes more solid.
Gold is continuing to flat-line between 917 and 922. Gold is below the 50 day SMA of 943.38 and still above the 200 day SMA of 813.98. Technically, the closest real support is 876.30. I am feeling very bearish here on Gold.
Dave Goodboy is Vice President of Marketing for a New York City based multi-strategy fund.