Market Observations 11/17/06

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.

The DJIA closed at a new all time high 12342.56, all major indices made new multi year & all time highs, except the XAU, XOI, DJTA, DJUA, SOXX & MID.

After a pullback, bonds rallied hard pushing TLT to a 8.5 month high and dropping the 10 yr yield to 4.60%. The yield curve inversion has suffered compression and is now severe as the 2 - 10 yr spread is paper thin at -16bps.

Gold pulled back to $622 as the dollar steadied and bonds waved. If the bond market is a gauge, tough times are ahead, and stocks are not worried, at the moment.

At the moment, SP500 hit 1403.75 and seems headed for 1415, NDX hit 1796 and seems headed for 1860. Its possible that these numbers get hit by Wen 22nd.

In such short order, this could signify a near term market plateau, which would mean consolidation before the next run up.

Odds & Ends: The Gap beat the number, but cut forward guidance. HP & Dell are now both under official SEC investigation. Marvell Technology Group, a chip manufacturer, gave a weak forward sales forecast.

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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