breakout likely, page-51

We may see $1 party again ?....

1. US durable goods plunge in July, cast shadow over Q3

2. Syria premium seen building in oil, gold:
Concerns about possible U.S. military intervention in Syria set markets on edge Monday and has now moved up the list of what is worrying traders.

Economic reports are also important, especially after new home sales Friday and durable goods Monday fell short of expectations. There is S&P/Case-Shiller home price data at 9 a.m. ET Tuesday, and consumer confidence at 10 a.m.

Stocks slumped Monday afternoon and buyers moved into bonds, gold and oil, after Secretary of State John Kerry said the U.S. believes Syria used chemical weapons on its people, a "moral obscenity." Kerry said President Barack Obama believes there must be accountability for chemical weapons use, and the U.S. is reviewing the situation with its partners.

West Texas Intermediate crude rose back above $106 per barrel in the late electronic session, after trading below that level during the trading day on word that Libya resumed exports from a terminal that had been closed. Oil settled at $105.92 on the Nymex.

"I think there's going to be a building up of the security premium. The rhetoric is going to start to fly," said John Kilduff of Again Capital. "I think this will be enough to get us through $108/109 resistance. I'm looking for it to get up to around $112/115."

Kilduff said while Syria is not a major oil exporter, it's location is key. "It's clearly become a proxy war for almost the whole region," he said. "What's happening is you have Egypt and Syria that are not oil producers…You have a tight market and two significant flash points, and it keeps getting undermined by things like the problems with the Libyan oil, the lack of Iranian oil."

Gold prices began to rise while Kerry was speaking, and crossed above $1400 in late trading. Earlier in the day, gold touched $1400 for the first time in 11 weeks.

"What I call a small fear premium suddenly appeared," said George Gero, analyst with RBC, of the move higher in gold. Gero said gold has been rising on concerns about the Middle East but also on other reasons, including recent speculation the Fed may not pare back on its bond buying program when it meets Sept. 18 because of weaker data....