THIS WEEK'S DATA

It was a surprise decline in orders for U.S. durable goods, those that are defined as having an expected lifespan of greater than two years that knocked investor confidence last week. The report is typically volatile between any two months, with volatile orders for aircrafts that can make or break the monthly reading.

Some of these requirements are for government and military needs and so it's to be expected that the series is volatile. However, the weakness in the recent data appears to coincide with the two related questions. How secure is the recovery? How much of the upturn is accounted for by government orders?

Both are valid questions, yet we're not sure we can unravel the truth just yet. Having shrunk 3.9% at the last tune-up the situation is clearly improving. Weekly jobless claims are trending lower, supportive of better prospects for consumption ahead, but we await Friday's key employment report from the BLS. Expect the unemployment rate to reach 9.8% and we still think that a double-digit pace will happen before the year is through. Expect 167,000 job losses to register from September's report. This report by the way will take the total number of job losses since December 2007 to above 7 million.

Much of the recovery drive from earlier this year around the globe was felt strongest in the manufacturing sector, which had come to a screeching halt. As output took its grip, rising business confidence became apparent and so in turned fuelled consumer and investor confidence.

On Thursday of this week investors will face a tough test when the manufacturing ISM survey is released. A reading above 50% indicates more optimists than pessimists surveyed meaning that diffusion indices are pretty reliable economic indicators. The August reading jumped four points for a ninth-straight gain, while last month the ISM also indicated expansion. What we'll be watching carefully in Thursday's reading is the new orders sub-index. In August it read 65% and one wonders whether the recent gray patch of data will cause this component to wobble.

On Friday the price of gold fell sharply as the dollar put in a brave hearted performance. The December contract closed at $991.60, which means we had two readers within a few pennies. We'll be contacting them during the week to welcome them aboard our Global Resources Alert. 

In overnight trading in Tokyo, a surge in the value of the Japanese yen had the early impact of sending share prices lower - the news impacts exporters poorly as it means less earnings are translated into a rising yen. The yen's fortunes seem to have turned as investors seem to be rooting for the political change offered by the new government. And with the top-guy at the finance ministry apparently backing a healthy gain for the yen, the currency is trampling across all major units to start the week.

Secrets to Trading Futures for Big Profits.
This report is written by a veteran commodities trader,
a hands-on expert who is incredibly experienced when
it comes to spotting trends and timing the markets.

The Supreme Council of the Secret Order of Jurojin

Tyche Research