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The market has made a great run since last Friday.  The UYM  has gone from a low of $7.85 on March 2, 2009 to trading at high of $10.24 today.  I would expect to see a pullback in the markets sometime next week of between 5-10%.  If this pullback occurs we would be setting up for a move over the next several months of 15% or more.

If we spike up over the next couple of days 2 or 3%, I would still expect to see a pullback in the markets before a another leg up in the markets.

After a strong start on Monday, we spent the next four days trading around and ultimately finishing up at the same exact level where we closed back on Monday:

With Monday's big gain, the S&P 500 gained +2.26%, Dow +2.46%, Nasdaq +2.62%, and the Russell 2000 +1.02%. To make the big money this week being long real estate (DRN), semiconductors (USD), emerging markets (EDC), basic materials (UYM), agriculture (DAG), financials (FAS), and large caps (BGU) offered nice returns. Relative strength was also seen in Russia (RSX), Mexico (EWW), India (INP), Sweden (EWD) and Australia (EWA).

What a difference a week makes:

As you know, a week ago things were looking quite grim, but as we've seen several times this year, this market has a knack for playing the comeback kid.

For the week, the S&P 500 rallied back +3.20%, Dow +3.20%, Nasdaq +3.29%, and the Russell 2000 +3.12%. To make the big money this week being long emerging markets (EDC), gold miners (GDX), silver (AGQ) and basic materials (UYM) were good. Relative strength was also seen in Brazil (EWZ) and India (EPI).

Read more of my weekly wrap-up.

A little choppy around options expiration, but overall it was another very good week:

Since last Friday's close, the S&P 500 gained +2.45%, Dow +2.24%, Nasdaq +2.50%, and the Russell 2000 +4.09%. To make the big money, being long real estate (URE), financials (FAS), small caps (TNA), basic materials (UYM), natural gas (UNG), energy (ERX), and emerging markets (EDC) were all good choices. The worst performances this week could be found in anything and pretty much everything leveraged short like the SRS, FAZ, TZ & SMN.

It was a four-day trading week, but a very good one for anyone long the market. Amazingly on 9/10/01 the Dow closed at 9605. As you can see, we closed at the same exact level today:

We closed 2 points above S&P 1040 and today only saw healthy consolidation in overbought conditions without much of a price pullback. That's a good sign, of course, but all of us know never to let our guard down. Next week we'll have more data to chew through and trading volumes should continue to pick up their pace as the fall trading season really gets underway.

Stories about inflation are all over the news:
Wall Street Journal, Associated Press, CNN Money, FT.com, a real good story from CBS news and from Peter Schiff who predicted the 2008 stock market crash.

We believe inflation will be a story for a while. Higher interest rates means higher inflation, they go hand in hand, though Paul Krugman sees it differently.