Pre Market

The Asian markets did well. Europe is streaked with red.

Today is the all important Philly Fed survey.

Leading indicators will be out 30 minutes after the open.

Jobless claims are up though its nothing astonishing.

Gold prices are attempting to pick up this morning after yesterdays drop.

The 10 year bond yield is up slightly this morning.

The US Dollar appears to have hit long term resistance and is likely to head downhill from here.
The chart shows the various peaks in late 2005 , early 2006 , late 2006 and now. Its been a series of lower highs and lower lows. Unless the trendline is decisively broken I would expect the downtrend to continue.








Pre market futures are showing a lower open. There is resistance for the S&P at 1520 and support at 1490. I expect a rally after a weak open.

Pre Market

The markets in Asia are very bullish save India. Europe is a mixed bag though things may change once the US markets open.

Economic Calendar
Housing starts on Tuesday and Jobless claims, leading indicators and Philly Fed survey on Thursday will be the main focal point this week.

Things to Watch

• the 10 year bond yield . Rising yield = lower stock prices and vice versa.
• the US Dollar. The USD has been gaining strength as of late which may cause the rising equity trend to reverse.
• the Japanese Yen. How much longer can the Bank of Japan keep rates low and how long before the carry trade unwinds.
• the price of Crude Oil. Oil is starting to break out as of late and lets see what affect this has on equities.
• the price of Gold. Gold is at a critical juncture and could go either way. Inflation is still a problem as the CPI showed and I would expect Gold prices to rise.

I expect the market to close flat to moderately higher today in anticipation of tomorrow's Housing data.

Gold breakout

Gold and GLD are breaking out . I would expect a test of $730 and more. $1000 gold is a distinct possibility this year.

WEEK 1 2007

1 week down (almost) 51 to go. Where does this put us ? What strategy does one pursue in the coming weeks ? How does one preserve capital yet maximize gains and etch out absolute returns in the double digits ? If I were not looking for double digit returns I would not hesitate to switch to the money markets at 5%. Iceland is offering me 13% for my money. The Chinese Yuan is a safe bet assuming the continuation of appreciation vs the US Dollar. The Euro has broken overhead resisitance in recent months and is heading for all time highs vs the USD. It looks to be a good safe haven for capital. I like Gold too in the form of Goldtrust Shares as it settles along support.

Job growth rose unexpectedly which has dampened investors expecting a Fed rate cut.If the economy continues to show strength , a rate raise would not surprise me. When was the last time the Fed lowered rates into a rising stock market ? I don't know but all I do know is that when the Fed does decide to cut rates, it will be to the backdrop of investors fleeing the US equity markets.