FUTURES SUGGEST A GOOD MARKET

Because I have an 8 AM appointment, I will keep this short.


The market is set up for a bounce this morning. OPEC has reduced production and Ike is moving into the GOM so the bounce may be concentrated in the energy area.



Mortgage rates have fallen 4 tenths of one percent in two days. The prospects for clearing out the backlog of unsold homes continues to improve.


Natural gas is growing in importance. A number of new pipelines are proposed. Millions of cars around the world have been converted to burn natural gas. Home appliances are being sold which can fill 70 miles worth of compressed gas in 4 hours. Good enough for millions to save about $1.20 per equivalent gallon.


Another key al Qaeda leader has been killed in the mountains of Pakistan. Iran has been accused of giving the US the intelligence it needs to go after the bad guys. There have been 7 US strikes in Pakistan in the past 10 days and 5 of them have killed high valued targets. The latest was the gentleman that was offered the slot as Prime Minister of Afghanistan a few years ago. The message the good guys or die.


Vice-President Chaney just spent 4 days in Italy. Italy is the founder of the NATO-Russia Compact. With only 20 days to go before the US budget or a continuing resolution must be passed, there are a lot of irons in the fire.


The next 10 to 20 days could be rough. Central bankers are continuing to apply pressure. Gold is falling and bonds are soaring; sucking the air out of the stock market.


The set-up is all but complete. Expect strong action within 20 days.