Over the July 4th holiday world markets were mixed and rather uneventful. The early going today in America was essentially a complete snooze, as the indices drifted around unchanged for the first half of the day. Beneath the surface, many of the high-flyers were strong, but other than that there wasn't a whole lot going on.
We won't get much corporate news this week, but we certainly will next week as earnings season commences. I expect to see some disappointment when it comes to third quarter (and second half) guidance, particularly in the tech arena, but possibly from other sectors as well.
See You Next Fall?
As for the market as a whole, there is a chance that the current rally turns out to be a failing rally, which would turn up the heat on Bernanke to do some variation of QE3 -- and all that would imply. However, we should not get too far ahead of ourselves as, first of all, we have to have some faltering in the equity markets for that to happen.
Back to the non-action, the afternoon was more of the same and, ex the beta-fest, nothing worth noting transpired. Away from stocks, the dollar was mixed, oil gained a couple of percent, Treasuries were higher, and the metals were strong. I think it is very interesting that after Thursday and Friday's thumping, the gold market fired right back over $1,500 (silver was equally impressive). There has been a sizeable liquidation of speculative interests, both in futures contracts and mining stocks (the latter of which have behaved quite a bit better over the last couple of weeks), although that is a relatively short timeframe.
When the S**t Misses the Fan
With so many people now fearing weakness in gold, the stage is set for all of those who prepared for gold to take a hit to now find themselves chasing prices higher. Whether that starts in July, August, or September I don't know, but I feel strongly that it will happen, and the earlier it begins, the more people will have to scramble.
