Economic Reports & Market Observations 10/31/06

Oct. Consumer Confidence DOWN to 105.4 vs prior 105.9 - Ho hum...

Oct. Chicago PMI DOWN @ 54.1% vs prior 62.1%

Inside the number: employment UP to 57% from 50.8%; prices paid DOWN to 62.5% from 69.8%; new orders DOWN to 54.1% from 67.3%; production DOWN to 59.2% from 67.4%.

Inventories UP to 67.2% from 63.5%, the highest since 1973. The 1st fingerprints of the auto industry emasculation are appearing as auto production cuts are starting to hurt suppliers. The dollar fell and bonds rallied on the news.

Market Observations

Yesterday, crude -3.9% the largest single day drop in over a year. If the SP500 closes below 1377 we may trend downwards for a few more days, a close above 1385 may signal a continuation of the uptrend possibly to 1405 by election day.

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