BBY is a Winner Today

Best Buy, BBY, provided some entertainment for the street today by announcing blowout earnings and then rallying 15% to an all time high. The comment in yesterday's posting tells it all. But, I wish to remind you all that in the Wednesday Update email version, we did point out that BBY was one of the winners. I know, I didn't really recommend it.

The market was fairly quiet, other than BBY, and Dow leadership came from GM, that's comforting to all of you bulls out there. The Dow continues trading near 10,500 in very dull trading. I usually say that dull markets don't stay dull very long but here we are with a stretch of 19 days trading near 10,500.

JPM, one of our shorts, announced that it would settle some of the Enron claims and pay a $2.2 billion fine. So, of course, that would mean that all the bad news is behind JPM--I am a little sarcastic this evening, sorry. We are only slightly down on this short (stock is up from where we shorted it) and would like to see some progress along with the market in the southerly direction.

Today showed last month's PPI, Producer Price Index, to be down 0.6% just the same amount it was up last month. This number "proves" that there is no inflation and the Fed can start thinking about slowing those nasty interest rate increases. For some reason the bond market was not buying it today as it closed down slightly, still showing fatigue after its big reversal day on Unemployment Friday. And, tomorrow brings us the CPI, Consumer Price Index, with expectations (before today's PPI at least) of a slight increase in the Core of 0.2% but no change in the all inclusive, we never pay attention to this number unless it is "good", CPI. Last month showed a worrisome 0.4% increase so one might think the number tomorrow might follow the PPI's lead and be down the same amount. I am so bad.

Gold and company moved down today and is trying to make me feel like selling our position. PAAS decided not to make a run at last week's high of 15.40 and instead dropped a bit today. We need to see a solid up day with a punch through that 15.40 to feel confident in the next up move. Looking at the HUI we see a similar pattern. The HUI is well above its low of 165.71 on May 16th and closing today at 191.39 down 3.37. The bullish pattern is very much in place. We would expect to see a powerful rally from the lows that develop over the next day or two.

Dow Industrials: 10,547.57 +25.01
BGEIX: 10.70