Calm Before the Storm...or Is It a Hurricane?

Oil(CLQ8) was up today to $145.37. Up $1.80pb.

Gold(GCQ8) was down today $11.50 to $935.00po

Dow was up today to 11,288.54. Up 73.03 today.


This is a great video talking about oil. 3-5 years could bring $500 per barrel oil Professor Hirsch says.








It looks like the storm might be changing for the short term at least. If you look at the UUP, you will see it has room on the upside to move over the next 5 to 15 days to 23. The UUP measures the value of the dollar. This equity index involves looking into the currency market, so it can be tricky. Trichet raised rates in the EU and possibly due to the influence of Paulson(US Treasury)made his rate hike sound as if it could be a "one and done" instead of a chain of rate hikes. Well, the market might have been expecting a series of rate hikes, and when they heard his guidance on the state of EU currency, the Market decided the Dollar was not going to take the beating it might have if the EU were to commit to a series of rate hikes.

This in turn is causing the commodities to break the pattern that they have been in.
They have been on a bull tear for over a year now and the world will need these commodities for years to come, but they look to be losing a little steam right now.

Ultimately though, until the Fed raises rates instead of simply talking about it, the US Dollar is cursed and oil and food will continue to rise to the occasion.

There are some great coal companies with high P/Es that are still available.
Our favorite is CNX(Consol Energy).

It was pretty interesting that that Dow closed below 11,300 today after being spending much of the session above that level. The news that came out today was anything but pretty, yet the market rose. This news might be digested over the weekend and we might see a tumble on Monday. Watch 2 elements to cause change either way.

One is Oil, hurricane or Middle East problems could send oil spiraling.
Two is the Dollar, if the Fed were to come out this weekend and pull a "Bear Stearns" out of their ear, it could have a positive impact on the dollar that would shift the Market into the an equity frenzy by crushing commodities.

Good Fortune from Trade-Equity!!!