Gold Still Smoking Hot — Nick Santiago 10-18-23 #536

Daily Market Wisdom with Nick Santiago

1. The major indexes are starting out a bit on the weaker side today. Traders should remember this Friday is options expiration for October. Today is Whipsaw Wednesday, which is often the most choppy session of the week before the Friday expiration. Rallies will often be sold and sell-offs will usually see big bounces. Be ready for a market that can be all over the map today.
2. Crude oil is catching a decent bid today trading back to $88.00 a barrel. This move up is solely based on geopolitical fears out of the Middle East. Honestly, I have no choice but to remain neutral on crude with everything going on geopolitically. There are just too many uncertainties in that region.
3. Yields had a huge day yesterday. The 2-year note yield traded as high as 5.20%. Today, the 2-year is currently trading around 5.19%. It is very close to the current fed funds rate which is 5.25 to 5.50%. When the 2-year trades into the Fed funds rate territory that tells investors that the Fed needs to hike. Watch this closely,
4. Gold is on fire this morning again trading higher by 1.75%. Obviously, the geopolitical events are helping gold to catch a bid as a safe haven play. Its getting a little overbought on the daily chart, but it's been strong. If you own it you trail your stop loss, but in this environment I would not sell it if you own it. The same for silver.
5. Bitcoin futures are trading slightly lower on the day. Earlier this week, Bitcoin caught a bid after the SEC did not appeal an earlier court ruling regarding a bitcoin ETF. So that is some bullish news, but the chart pattern on the weekly chart is still bearish.