Thursday, December 01, 2005


Santa is coming early. The markets are all green.

$sox up 4.1%, $osx up 3.26%, $xoi up 3.43%, $xau up 2.8%, $xal up 2.25%, ewz up 2.9%, eww up 2.3%, ewj up 2.25% and 30 year bond yields up only .49%!

The economy is strong and inflation is tame! I believe the housing numbers will be revised downward. With the ECB and the FOMC beating on Gold, the inflation scare is almost done!

Random Roger has asked if this looks like a blow-off rally. It does. Bulls might get a little tired after such a long, strong run. On the other hand, sentiment numbers are not nearly as extended as one might guess. Bulls to bears, puts to calls, Rydex long to shorts and other numbers have moved but again not as dramatically as one might have guessed. I'll study these and other information tonight and tomorrow morning, but for now I am thankful to be holding onto this bucking bronco with all my chips in hand.

Oil, airlines, gold, small caps, large caps, defensive, value, growth all moving in the same direction. You have to love this market! Bonds or commodities are going to have to diverge pretty soon. I believe it will be the commodities that break ranks and fall. It may take a couple more bumps by the FOMC and the ECB!