U.S. stocks capped their best three-day run in 10 months on Wednesday, lifted by technology and industrial shares after Spain unveiled an austerity plan that reassured investors Europe was addressing its fiscal ills.
In fact, the Dow ended back above the May 5th close of 10,868.12, the close the day before the swoon.
However gold also traded higher, in a flight to safety.
Can gold and stocks move in the same direction for more than a day or two?
Instant Insights with the Fast Money traders
Right now it looks like stocks and gold can climb simultaneously, says Tim Seymour. The move in gold has to do with investors looking at gold as a hedge for currency failure. The move in stocks, however, is a growing willingness to assume greater risk.
But as far as the traders are concerned, gold probably has greater upside.
The charts look phenomenal, says Joe Terranova. I think hedge funds are all-in on the precious metals trade. I think gold is pushing toward $1250.
As far as I can tell every scenario seems bullish for gold, adds Brian Kelly. Either we get inflation and that’s good for gold. Or Europe falls apart and that’s good for gold.
Stocks by contrast, could be challenged.
Looking at the market broadly I wouldn’t get too giddy just yet. 1172 remains a critical level on the S&P, says Guy Adami.
And if we advance rather quickly to the highs we saw a couple weeks ago and fail we’re looking at a classic double top, adds Joe Terranova. That could signal we’ve made the high for several months.