Planet Wealth

The big news on Friday was the much lower than expected job losses which immediately spiked the futures prior to the open.  The market opened higher and then around 10am dropped in a hurry.  It was like all of a sudden someone realized, "wait a minute, if the economy is actually improving the Fed will have to start raising rates sooner."  The dollar took off to the upside logging in the biggest one day gain in quite a while.  We know the drill, stronger dollar weaker market.  The market still managed to close to the plus side, but just barely and well off the earlier highs.  The dollar was extremely oversold short term and this gave some of the shorts an excuse to cover.  The question now is "Was that it for the weak dollar?  Is the Fed really going to raise rates sooner rather than later?"  Remember, equity markets hate nothing more than rising interest rates.  However, Bernanke is known as an "easy money" Fed guy and has pledged to err on the side of too much liquidity rather than raising rates too soon.  The Fed has other vehicles in order to withdraw liquidity before raising rates and it is likely that's what a Bernanke lead Fed will do.

In overseas markets Monday, Dubai recovered nearly 4% making the Dubai World issue seem like a distant memory.  Not much is happening pre-market with the futures, gold or the dollar at least not yet, so at this point is looks like a flat opening. 

There will be new trades placed (finally) after the market open so keep an eye out.