October 21st Edition

Good Morning All,

Markets bivouacked yesterday, taking a much needed respite from their collective march toward higher levels. As readers of this letter are well aware, we like to use the S&P 500 to mark the overall progress of world indices. With this in mind, please note that our projected short-term target of 1200 now appears to be well within reach. This much vaunted event should occur during the first week of November, at which point we would advise traders to step back for a time, or at least until a more definitive pattern emerges. Longer-term investors may wish to stay aboard for the longer journey, which will likely end some five or six years from now; as that is the average length of the modern business cycle...boom to bust.

There continue to be a number of positive fundamental signs indicating that the economy is staging a solid recovery; some now even believe that an upswing of major proportion is looming. Please google ECRI for its economic take on the world. Earnings have also added a much needed boon to the market's positive nature, as roughly 73% have come in ahead of expectation thus far in the reporting season. It is once again notable that the "libertarians" who hold most of the microphones at CNBC are still bearish, and that their idols on Wall Street who brought us much of the debacle in the first place, remain skeptical of all things Obama. It is indeed curious to watch and listen to the most verbally patriotic Americans literally embrace the hope that he and the Democrats will fail in their efforts to stabilize the country that many of their ilk have so willfully destroyed. Remember where we were a year ago and think once again of how the world may have fared under a McCain-Palin administration.

Also of interest was a recent report showing that average home prices in London, England have reached all-time highs, exceeding the previous record set in November 2007. I don't think this represents the outset of a new housing bubble, although similar such growth in Asia may prove to be a longer-term problem. In short, there will be another bubble in some sector, somewhere...but it is too early for it to burst. Gold, an exceedingly rare and rather useless commodity, is showing all the signs of becoming just such a candidate; if so it will likely top out well above 3000$ per ounce, a very long way from here.

In the meantime, refer to my potash stock list of last November, pick up some of my previous gold selections and be aware that China, BHP Billiton and others are hunting acquisitions...even uranium is making a comeback.

Commentary Now that a little time has passed and the brow beating nastiness over Obama's Nobel prize has subsided, I would like to reflect upon what I thought then and now.

The United States , and by proxy, the world, has recently moved from a posture that celebrated war and hubris under Bush-Cheney toward a cerebration of peace and diplomacy led by Barrack Obama. This act of hope alone...is worth the award.Sometimes, what you do is not as important as what you provoke or inspire others to feel. Affect is often the prologue to effect, and we have travelled a great distance in one bold step...that is what the Nobel committee recognized and America , through this gesture has once again resumed its role as World Leader.

"Some see things as they are, and ask why; others dream things that never were, and ask, why not?

The above is a familiar Shaw quote made famous by Ted Kennedy eulogizing his brother Bobby. Bill CoppMontreal , CanadaOctober 21 2009laurelcommentblogspot