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Commodities Crash, What To Do



May 05, 2011 – Comments (0)

The Dollar ripped higher today causing commodities to be annihilated. The Dollar jumped on ECB comments that pushed the Euro lower. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) hit a high of $21.18, +0.23 (+1.07%). This is a gigantic move in the Dollar. The Dollar has been collapsing lower all year but seems to have found support around current levels with QE2 coming to an end.

Silver is continuing to collapse. This is a sell off of epic proportions, following the 80% run higher in the last three months. The iShares Silver Trust (NYSE:SLV) is currently trading at $35.40, -2.87 (-7.50%). This is after hitting a high of $48.35 a week ago. In total, the sell off on silver is now at a staggering 27% in one week.

Jobless Claims shocked the markets today. After being in the 380,000 range a month ago, last week Jobless Claims jumped to 431,000. At 8:30am ET this morning, Jobless Claims were reported at $474,000. The increase in these numbers is shocking and the markets are reacting with selling. Tomorrow, the Non Farm Payrolls and Unemployment Number will be released. These will give further insight into the state of the jobs market in the United States.

There is a massive rotation underway in money over the last week. Money is running from commodity stocks and into old school technology. While stocks like Chevron Corporation (NYSE:CVX) are getting crushed this week, old school tech stocks like Hewlett-Packard Company (NYSE:HPQ) and Intel Corporation (NASDAQ:INTC) are moving higher.  This is a classic maneuver as money is looking for a new home and also looking for safety.

Gareth Soloway

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