Begrudginly higher....

So driving in this morning, I heard the BOE cut their rates and the ECB did not as apparently Trichet is still talking tough on rates. Not for a second did I think that the dollar wouldn't be lower on these decision. Nevermind the fact that the Fed Funds rate is 3% and the ECB rate is 5%, why let the facts get in the way of a grand operation. However, I also wasn't surprised to hear that gold was up $6 as I have been saying at some point we would see the dollar and gold going higher at the same time. Whether this is the start of that trend, I don't know.

Of course, almost every retailer and his mother reported pretty bad January sales, this coupled with CSCO's blow up from last night had the market looking rather gloomy. Gold of course, at this point, about 10 minutes from the CRIMEX open, was now almost down on the day. (So predictable.)

There is no other way to describe the economy other than it's a complete mess and getting worse. January, over the last few years, has usually been a better month for retail as all the gift cards that were given for Christmas are redeemed. However, this year there are many reports that these gift cards are being used for staples such as food. Not the picture of a robust economy.

Pending home sales were released around 9am and, relativley speaking, they weren't a disaster. This put a bid under the market and off we went.

Gold, flipped and flopped all day. At one point it was up $8, only per the course, it gave it up and was quickly down $4. But later in the day, gold, against the shorts who fought it all the way higher, managed to close up $6, about $4 off the high.

Now the gold stocks on the other hand, acting pretty piss poor the entire day. I still maintain that gold is not through its correction just yet. Call me old fashioned, but I will not change my opinon on this matter until either the gold stocks finally rally or gold corrects more. Both are possibilities. If I miss the initial move, then I miss it. When you trade, opportunities are much easier made up then losses.

Back to the dollar for a second. All I heard today, in print and on TV is how the dollar has bottomed and should go much higher from here. I honestly don't see how it can go higher other than a short squeeze, IMO, we got since the operation began last Friday. I just can't see how the fundamentals of the economy coupled with Helicopter Ben will allow for the dollar to go higher on a sustained basis. Yes, I know things are poor in Europe, but for now, Trichet is still saying that keeping inflation in check is the goal via interest rates. I guess, for now, I believe him. But like any goood CB head, he will prolly cut rates the second the shit really hits the fan.

Speaking of paper tigers, another Fed head came out and hinted that the Fed was done cutting rates. After I recovered from my laughing fit, I read the details, and like every other Fed speaker who is trying to show that the Fed has balls, the speech said that the Fed has to be vigilent when it comes to inflation and that rates are fine where they are.

I am getting tired of saying this every single time, but if the Fed was serious about rates, it WOULD NOT HAVE CUT RATES 1.25 POINTS IN A WEEK WHEN SEVERAL MAJOR COMMODITIES ARE AT ALL TIME HIGHS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! The Fed would not cut rates in order to just save the stock market.

I will take all wagers that before this is said and done, the Fed Funds rates will be at 1% or lower before this is all said and done. Who is the Fed trying to kid, they are Wall Street's bitch and they know it.