Market Update 18 Jan 2013
Stocks, bonds, and currencies (other than Bitcoin) were weaker this week, while commodities, with the exception of copper, were higher.
Among the government issued currencies, the Japanese Yen was weakest, falling 2.8%, while the Euro was the "least weak", declining only 0.3%. The US Dollar ended 2012 right at its 200 day moving-average, pushed above it in early January – reaching 18.9 mg on Jan 7th, 10.1% above the half-life predicted value – and has since retreated, ending this week at 18.4 mg, down 1.2%, and sitting 7.8% above the half-life curve forecast.
Bitcoin, the free-market internet currency, was the strongest asset on the list this week, rising 9.1% to close at 288.8 mg. This is the highest level seen since July 2011, and is higher than any trading period except the 5 weeks in June and July of 2011 when the BTC spiked to 598 mg on June 9th. In the next few months, look for significant resistance between 320 and 350 mg. Once that is overcome, there there is little in the way of a retest of the old high.
Bonds were lower, with the long term TLT (down 1.7%) falling a bit less than the short term SHY (down 1.8%). TLT flirted with its 200 day moving-average at the end of 2012, reaching a peak 1.4% above the average on December 28th, then closing decisively below on January 2nd. TLT now sits 3.6% below the average at 2.21 g.
Among the equities, gold stocks were the weakest, with the HUI off 2.6% (the largest drop for any asset class this week), followed by the Nikkei Index, which was down 1.8%. The S&P 500 fell 0.9% this week, but is up 2.7% for the year so far.
Among the commodities, cotton was the biggest gainer, rising 2%, followed closely by silver, up 1.8%. Crude oil and coffee rose slightly, while copper declined 1.4%. Platinum (not on the list below) finally traded above gold parity this week, 0.5% above gold on Jan 17th, but dropped back to finish the week up 1.2% at 30.89 g/oz, 0.7% below parity.
US retail gasoline continues to hover near its all-time low at 61.7 mg/gal, and the UN's international Food Index for December is also near its lows at 43.4. The sugar and oils components of the index are at new all-time lows.