Commodities Harangued by Losses, as King Dollar Reigns Glorious

The market doesn’t always make sense, but today it does.

Let’s review.

Stocks are higher because the economy is doing well, as indicated by the July jobs report.

Yeah I know, 94m people aren’t in the jobs market. Fuck those people.

The dollar is surging v the euro because people believe the Fed will hike rates. Frankly, if the economy is strong, they should. Moreover, people should get over it already.

As a result of the perceived tightness in US monetary policy, the dollar gains are pushing down commodities.

If we’re being true and honest here, gold, silver, oil and the rest of them should trade down on the perception that the Fed will hike. This was the primary reason why I sold out of my gold positions. Moreover, this is one of the reasons why I am short FCX and oil drillers.

As far as bonds are concerned, the short duration yields will be affected most. As a matter of fact, US 30 yr should do okay, since we didn’t have QE in the first place. Plus, the market is always skittish about the global economy and will continue to buy our bonds in favor of Japan and Europe’s. Providing negative yields persist overseas, a floor is in place for TLT.