Major Short Covering Today

The biggest gainers in the U.S. stock market today are the Financials, Home Builders, Restaurants, Airlines, Hotels, and Consumer Discretionary companies.

All of these sectors have been heavily shorted with 10% or more of the outstanding shares being bet against.

Traders are unwinding these short positions resulting in large gains of 5% or more in these stocks.

Both high-quality and low-quality companies are increasing in value today.

This is a good time to continue to hold certain high-quality names for the long-term while taking profits or establishing new short positions in lower quality names.

Commodities Falling Rapidly Today

With global growth coming to a standstill and recession spreading from the U.S. to the rest of the world, demand for commodities is falling.

Today, gold is down $30/oz. and oil is down $10 per barrel.

The U.S. dollar also is gaining value today, especially relative to the Pound, Euro, Canadian $, and Australian $.

The gain in the U.S. dollar is exacerbating the downside move in commodities.

The relief in commodity prices is welcome for those of us who have had limited pay increases over the past two years.