The specter of progressively higher inventories is blunting the impact of geopolitical tensions, making it harder for the market to climb.

The IEA report confirms the bearish sentiment in the market. Inventories are more than adequate, but geopolitical worries have been supporting prices. We haven't heard anything inflammatory from Iran's president recently.

The market can go higher, led by commodities stocks. Metals price should stay strong as most have low inventories and the trend is up for gold.

Geopolitical tensions continue to keep people invested in gold. People are content to be long in precious metals than the dollar, or other investments.

So far, the cracks in the housing market are not that great, but with inventories skyrocketing, that may not last long.

The harder you fall, the higher you bounce.