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Commodities Push The Market To New High (Oil and Gold Watch)!

|Includes: AEM, ARCH, Cleveland-Cliffs, Inc. (CLF), DO, GOLD, MEE, NEM, PCXCQ, RIG, SLB, WLT

In my Market Forecast (click here) this weekend, I said,

"Many tech and financial leaders could use a breather.  On Tuesday, we have the FOMC meeting.  The market may act undecidedly ahead of the meeting.  If the market slips ahead of Fed's rate decisions but manages to keep close to SPX 1150, we could get another bump higher..." 

Indeed, on Monday morning, we saw the market open lower.  GS dropped almost down to $170 and AAPL touched $220.  But, in the afternoon, the market came back up.  SPX, eventually closed a little above SPX 1150.  Today, Fed gave no surprises and kept the rates at historic lows, and the market rallied higher.

Miners were strong today.  Coal stocks were hot!  CLF received yet another analysts upgrade, up +4.94% for theday.  WLT bounced back +3.51%.  PCX and ACI both cooked up almost +6% as buyout speculations brewed.  After the market, MEE announced a $960 million deal to buy privately held rival Cumberland Resources Corp.  Gold miners were also strong:  GOLD +3.12%, NEM +3.24%, AEM +3.1%.  We also discussed gold plays in the Sector Watch this weekend.

The quick pullback on Monday morning gave the market indices a little more breathing room.  As the Fed gave no surprises, the market resumed its rally.  Financials and techs came back up and are testing last week's highs.  The drop in dollar helped fuel the commodity sectors.  Gold tested $1130 today, and GLD closed above $110.  GLD should challenge $112 again soon.  If $112 is broken, GLD could run, which means we might see gold test $1200 again.  USO jumped +2.47% today as oil went up close to $82/barrel.  USO still got some room before reaching $41, which was the high set back in January.  Last October, USO visited this $41 level and also was not able to break above.  So, if USO breaks $41, oil could run.  Potential higher oil price is bringing buyers back into energy names, especially the oil services stocks.  OIH added $2.08 today.  We will starting paying attention to SLB, DO, and RIG again.

Good night and HappyTrading! ™

Disclosure: GOLD long