RIGHT SAID FED

ALL the major currencies are going to correct against the dollar because of our postion of rising rates and the rest of the world is on standby and below our rates.

And is another sign of DEFLATION VS INFLATION.

IMHO, that would mean the FED has failed in its attempts to INFLATE the debt away, instead we got heaps on top of heaps of it.

There will be a clamour for $$$ to pay off debts. GOLD is at same place it was almost 10 years ago, certainly, golds decscending tops are not screaming inflation, but the FED sees different.

The US Dollar has broken OUT of its downtrend line back from early 2001.

Is risk being avoided? JUNK BOND index has collapsed as Bonds gain strength.....the SPREAD widening.

NAZ coming up to its 200 SMA to test, the NAZ is out pacing the DOW and TRANS, but if weakness continues they will be dragged down with rest.

Hedge funds (large specualtors) have embraced this rally and turned quickly away from their short, these guys are usually on WRONG side of market.

EWT points out that 10,400 (old support) was near .382 FIB of decline, it turned back rally, is now resistance.

WE have divergence between DOW and NAZ, this should be cleared uo next week.

Is part of this ANOTHER ROUND of rotation< out of weaker groups into stronger ones? given HYPE over CSCO and DELL? IBM not joining party?

ALL this "GOOD NEWS", and the market is volatile and staring closer to 10K than recent 2005 highs.

Bond yield near 4% is telling me reflation efforts have stalled. a Flight to "quality"? away from JUNK to Treasuries.

A market controlled by the playa's, and make NO mistake about it, I smell a bear out there.

D