Market Observations Week Ending 09/08/06

In our top story tonight, the leader of al-Qaida in Iraq, Abu Musab al-Zarqawi, is STILL dead and someone else has taken his place.

Last weeks economic reports: ISM Services 57 vs prior 54.8; Initial Claims 310K vs prior 319K; Wholesale Inventories +0.8% vs prior +0.8%; Consumer Credit +$5.5B vs prior +$14.1B.

Conclusions: The economy is slowing down and consumers are spending less.

The SP500, DJIA & NAZ closed at 3 month highs then during a short week took a tumble with options unwind, oil pulling back from $79 to $66, gold tumbling to $604, yet the dollar treaded water as bonds took a breather.

We still look to around 09/11 as the next inflection point in this choppy sideways, flagwaving pattern. We observed the RUT breaching 716 then hitting resistence at 730. Perhaps TUES 10 yr note auction will tell...

Keep it tween da ditches, we take it day by day and keep our eyes peeled to the sky, because it could be a name brand that pancakes us. Just my opinion, I could be wrong, this is The Nattering Naybob and your NOT!!!

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