Say Goodbye to 10,500

The Wednesday Update blog returns and sees the Dow comfortably under 10,500, about at 10,300. After over a month at that 10,500 level, the Dow has finally dropped and is now having difficulty staying up. Of course, there are plenty of bulls out there to try to hold it up but they can only do that for a while.

There are a couple of comments out on the last blog providing some fresh air in an otherwise dull, maybe I should say nonexistent, blog the last week. Dullness was not the theme of the market the last several days, however, as the Dow has now fallen 332 points in six straight sessions from its high of 10,623. After a false breakout to the upside, the true move is emerging and it seems fairly strong to the downside.

You may be asking what has caused the drop and that may be important but it probably can't be determined by reading the news. Or, it may be. I was disturbed by last week's Supreme Court ruling that expanded eminent domain. And, that could have had a significant impact on the market--or not. I just saw that it coincided with the market dropping.

There are plenty of reasons for this market to drop, such as the price of oil and gas, oil carrying a six handle for the first time ever(meaning it's over $60). I was amazed by a report showing the "inflation" adjusted price of oil and how the price of oil is less than it has been in the past on that basis. Let's try to put a bullish spin on the high price of oil, shall we. Right.

The precious metals have shown some weakness in the past week along with the market and may show some more. This drop should provide another good opportunity for you to move into the complex. The HUI may drop another five or ten points from tonight's 196 with a powerful move up to follow. We will provide tighter entry points over the next few weeks.

All eyes are on the Fed as they will be announcing something this week on interest rates. I believe the announcement comes on Thursday afternoon so get ready. We have been thinking the Fed is starting to get into trouble with raising rates and have even predicted that they will not raise rates this week but it looks like they have to raise them. We will see, more on this in the next few days.

Dow Industrials: 10,290.78 -7.06
BGEIX: 11.06

PS My son's wedding was perfect.