October 29th, 2008 Edition

Good Morning All,

Someone recently asked me when I thought the Dow Jones and TSX would trade back over 10,000, I replied November 5th, an answer that has since led me to wonder, considering yesterday's stunning reversal, whether I was being a touch too conservative. Well let us not get too carried away with the power of the recovery as it is still only one day old in North America and two around the world, after all we have seen this movie play as recently as October 12th and 13th. The positive and longer term take we have out of this action is that base for a greater move upwards is growing and that the breadth of this advance has put in place an extremely important building block. Look for today's rate cut by the FED to solidify markets by week's end after the initial rollercoaster ride it often encourages has subsided. This market may have begun to discount bad news and as a forward looking discounting mechanism...this is what it is supposed to do when it is about to change trend.

The Barack speech tonight does not have to be a game changer, it just has to be a good closer. These next few days are going to be nervous ones for many of us around the world and in America as the fear of a Karl Rove inspired upset interferes with our logic. Yes it should be a Democratic sweep, but if things were things and real was real....Al Gore not George Bush would have been President in 2001 and we would not have to talk about Iraq (someday soon) or deregulation concerns now.

A commodity price recovery has also begun and with it our loonie should return to the 85 cent level before your trips south.

Note: 79 years today since the crash of '29. Just a mean thought, not a serious one, to help start your day.