Mostly: Classical

[Frank Pembleton]

Kastel...nice to hear you've got a substantial cash position-- you'll need it as the events begin to unfold. I'm certainly not going to rev up that big bad bear machine (not yet anyway) because there's still so much conflicting bearish data and yet there's still every reason to be bullish on stocks:

Leading Market Indicators:

My first chart is the 10-year T-Bill -- rumour has it that the fed (the "damned fed" as Kudlow would say) is going to cut interest rates by a half point. Falling interest rates are bullish for stocks...as bond prices rise, stocks tend to follow.



A good confirmation index for the 10-year note is the interest rate sensitive Dow Utilities-- and looking at this chart I still do not see any reason to make a run to the hills call. You'll notice that the 9 DMA hasn't (as of yet) made any attempt at crossing over the 20 DMA and we're way above the 50 on the RSI.



I'm betting that the markets will open down on Monday, possible down pretty hard-- only to finish up by the end of the day. For the folks who are long on gold stocks-- tomorrow morning might give you all a chance at profit taking on your trading positions.

...as the machine keeps marching forwards.