This morning the durable goods orders showed some surprising strength, coming it at +1.4%, given expectations of a drop of 0.5%. That news didn't do to much to the market even though the Dow did pop about 30 at the open and then faded; but, by the end of the day, the market managed a solid gain. The apparent reason given was the positive undertones in the Fed's Beige Book saying the economy is strong and inflation is tame. The Dow managed to climb above that 10,600 again and, as CNN put it, the SP500 eked out a new four year high--powerful talk. Good selling opportunities around now.
Not much else to report today so I'll pretend it's Wednesday... The bond market seems to be searching for a tradable bottom and the Treasuries may try to rally back to the early June top we have mentioned here several times. I think the difference this time will be that housing will not respond so strongly to another drop in mortgage rates like it usually does. That would be a significant clue for us to know that the housing market and therefore the economy is ready for a correction.
The precious metals were trading opposite the dollar today, as they should. This morning the dollar started out rather strong and ended up weaker, also as it should given the tongue lashing it got from the Chinese this past week. The Chinese apparently entered the currency markets to stabalize their currency as they said they would like to keep it near its new target. Back to the precious metals, they managed to find some footing and rallied a bit into the close.
As mentioned in the past week, we are getting cautious the mining stocks even though there looks to be a pretty good rally coming in them near term. We are going to sell into this next rally if it is sharp enough. There should still be time to hold.
Dow Industrials: 10,637.09 +57.32
BGEIX: 10.96
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