RALLY

 A 65-point rally in the Dow Jones industrial average ended what so far this week has been a 200-point decline. The rally was accompanied by evidence of firmer activity at retail stores, while the basic material sector was supported by a jump in gold mining stocks as the price of gold came within an inch of $1,000 an ounce.

Gold's rally is curious. There is little pressure on bond yields - rather yields were driven lower by the nervousness exhibited by equity prices around the globe.

Will they pick up as stocks rally?

We think they will. Equity prices should have already broken through support this week if investors were really that nervous.

The dollar is not showing any extraordinary weakness. When the dollar gives way, commodities tend to respond well as they maintain their value. The dollar, however, is hardly cracking under the strain at present.

Friday brings the August jobs report from the Department of Labor, in which the market expects another 247,000 jobs lost. That would raise the rate of unemployment to 9.5% - but watch out for that bigger number - the data series that Paul Tudor Jones and his portfolio managers will be watching. The number of disenchanted workers may be closer to 16% and is his reason for why the recent bullish trend for stocks is merely a bear-market bounce.

Retailing stocks fared well and helped buoy the broader market on signs that consumption is alive and well at least in some quarters.

Friday should be an interesting day as the market digests the latest jobs survey. A relief on the jobs front could see the stock market try to rally back to a positive territory.

A bad number could see the price of gold surge.

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