Morning Wrap

This morning the major stock index futures have all surged higher after the initial claims for unemployment benefits declined by 27,000 to 451,000. Analysts had expected the number to be reported around 470,000. While the weekly unemployment number is better than expected the fact remains that there are still 451,000 new claims and that is certainly very high for this stage of a recovery. In any case the stock market has bought into the number and the markets are trading sharply higher before the opening bell. Today is the start of the Rosh Hashanah holiday and the volume is again expected to be very light. Often when the volume is light in the market it will favor the upside price action. Hence the old market adage, “never short a dull market”. Tomorrow is a Friday and this is also a day when the trading volume is usually very light. Therefore, it looks as if the major stock market indexes could remain sideways to higher into the end of the week. At the open this morning just about everything in the stock market is catching a bid higher. The one area that is showing some intra-day weakness is gold. The SPDR Gold Shares

are trading lower by 0.30 cents to $122.41. This slight decline in the GLD comes as the fear trade wears off. It is also important to realize that gold is short term overbought on the daily chart and could be due for a pullback. Please realize that as long as central banks around the world continue to print money gold will be held by the institutions. The U.S. Dollar Index is also trading lower this morning by 0.16 cents to $82.43. When the dollar declines it will usually help to inflate the markets higher. However, should the dollar rally or catch a bid higher it is important to note that this will often deflate the markets and cause a sell off or decline. That is today's morning wrap. Nicholas Santiago Chief Market Strategist www.InTheMoneyStocks.com