Monday Market, Up Slightly

Tonight we have very little new information about the direction of the market.  It was a Monday and it was fairly flat.  The bond market did take a little hit which should start to be noticed over in the stock market.  Complacency rules in the stock market.  

Next week we get another look at what the Fed has to say about interest rates and it should be sort of comical to see what they say.  They are obviously in an unusual position with wanting to raise rates and at the same time seeing the New Orleans situation.  My current guess is that the Fed will raise another quarter point when it meets next week.  What this will do to the market is anyone’s guess.  

The market wants so desperately to be bullish regardless of the news.  This is due to the heavy liquidity being thrown at the market in the wake of Katrina.  This is the same type of thing that happened right after 9-11.  This time it is in the midst of rate hikes but it still has the same reaction in the marketplace, rally in stocks.

We still think that we are pushing up against a fairly solid ceiling.  If we do break through, the break could be a short covering affair with a violent conclusion on the down side.  We don’t like that scenario but it is possible.  If it happens in the next week to match up with the Fed’s meeting, at least there will be a news event to mark a high.

I’m trying to be patient and pick a good solid top to short.  In the mean time, we are happy with our little gold mutual fund with was down a penny today after a new relative high on Friday.  We look for more upside in the near term.

Dow Industrials:  10,682.94  +4.38
BGEIX:  12.32