Saturday, April 4, 2026 
Market Rap 04 September 2009
Volumes dropped to their lowest levels of the week today on the NYSE and the NASDAQ as traders hit the eject button earlier than normal ahead of the three day weekend in the US.
The S&P futures closed near their highs of the day as well as at the 50% retracement level from the highs of the week. The pit traded S&P showed a pick up in volume that was not seen in the e-mini contract. S&P Pit Contract - Daily Chart Gold Futures - 15 Minute
Gold traded within yesterday’s range and closed near the highs (but just below the $1,000 barrier). Traders continue to ponder the move in gold — whether it’s a fake out or breakout.
I spoke to several trading desks today. Not surprisingly, our conversations quickly veered to gold. From what I gathered, because of the sudden interest — be it a squeeze or not — traders are buying gold now and planning to ask questions later — a strategy that has a tendency to bite back hard if things don’t work out as planned.
Fed fund futures are pricing a 1.5% chance (extremely unlikely) of a fed funds rate rise by the December FOMC meeting, which could be the catalyst behind the sudden spike in gold prices. The longer the fed waits to raise rates, the larger the inflation problem will be.
For the time being, I reside in the deflation (versus inflation) camp. If gold does break above $1,000 and holds the line, I’ll buy gold futures faster than I can blink. My deflationary thesis is fundamental. A breakout in gold would be technical. When in doubt, I typically run with the technicals. Further, being long gold against my short equity/short commodity exposure will provide a decent hedge, which is not to imply that I am a fan of running a hedged portfolio.
Markets are closed in the states Monday, so I am jetting off to China in the next couple of hours to catch the Monday session in Shanghai. If I see anything worth pointing out, you’ll be the first to know.
And that’s a rap.
