Commodities Hit New Highs On Dollar Dip

The market is higher again in early trading, as the buyers seem to show up each and every day lately. The S&P 500 surpassed the 1250 level this morning, a level that many investors associate with the "pre-Lehman" levels last seen in September 2008. As such, it is possible that the market could run into a little resistance at these levels.

The euro is getting a small bounce after China said it supports EU and IMF efforts to stem sovereign debt troubles in Europe. The dollar is weaker in turn, which is helping push commodities to fresh 2-year highs. Oil prices are higher to $89.85, and gold is up near $1390, but other commodities from copper prices to cotton futures have hit new all-time highs.

Asian markets also rose overnight amid easing tensions on the Korean peninsula. The 10-year yield is lower to 3.33%, and the volatility index is a bit higher to 16.55.

Among the sector ETFs, financials (+1.16%) are strongest so far, followed by materials (+0.90%). Consumer staples (-0.20%) are the laggards on the day so far.

Trading comment: Sentiment continues to be stretched up here, but it looks like fund managers have an agenda to put money to work before year end. But for anyone who doesn't have those performance pressures, I think a better buying opportunity will come on a pullback that almost always ensues when investor sentiment reaches these types of levels of complacency.