S&P 500 to 1,280?

Days like yesterday are never fun. The selling hit
everything; oil stocks, tech, stocks, commodities, retail, gold, silver,
you name it, it was down. Well, except for Treasuries and the U.S.

Treasuries are a safe-haven, but in a different
way than precious metals. Precious metals protect wealth over the
long-term. Treasuries can generate a return even for a trade.

Oil is Hot, Silver is Hotter

Oil is getting all the headlines, as it jumps over $100 a barrel for the
first time in 3 years as Libya’s production is essentially shut down. But
it’s silver that’s really setting records.

Silver prices are projected to more than double this year.Silver
hit a 31-year high just below $35 an ounce on Tuesday.

Silver is benefiting from the same inflation concern that’s pushing gold
prices higher. But unlike gold, silver also has industrial uses.

That means silver prices may be more stable than gold.

Cisco, Apple and the Nasdaq

For an economy that has been highly dependent on
government and corporate spending, Chambers’ outlook wasn’t very
encouraging. But on a day when Cisco was pounded for around 15%, and Google
(Nasdaq:GOOG), Microsoft (Nasdaq:
MSFT) and Apple
all finished in the red, the Nasdaq as a whole actually posted a

Now, Apple alone accounts for 20% of the Nasdaq
100 (the 100 largest stocks on the Nasdaq). Throw in Google (4.2%),
Microsoft (3.6%) and Cisco 1.6%, and you’re looking at 30% of the Nasdaq
100. Nearly one-third of the Nasdaq 100 was lower on Thursday, easily the
most influential tech companies, and the Nasdaq managed a gain for the

Wall St. Bonuses Record $135 Billion for 2010

Even after Wall Street’s greed nearly collapsed the banking system and
forced hundred of billions in taxpayer-funded bailouts, bankers are still
finding ways to line their own pockets.

The Wall Street Journal is reporting that bonuses at
publicly traded banks hit $135 billion in 2010. That’s a record high for
compensation on Wall Street. It works out to about $141,000 per

This $135 billion represents a 5.7 percent increase in combined
compensation for the same group of companies in 2009.

Inflation And Interest Rates

The bears’ futile attempts to take stock prices
lower have been good sport to watch. The first level of support on the
S&P 500 is 1,280. The S&P 500 has closed above that level every
day since January 12. That’s 8 straight days.

Even last week, when it looked like a correction
was looming — after stocks sold-off on the good news from Apple
IBM (NYSE:IBM) — the S&P 500 fell all the way to 1,271. But it didn’t
close there.

When Good is Bad

What happens when employment numbers improve and the
unemployment rate starts to fall? Is that the point that the Fed
announces an end to its monthly QE2 Treasury purchases?

Yesterday’s blowout ADP payroll number has raised
expectations for tomorrow’s Nonfarm Payroll number. The consensus
expectation was for a gain in the 130K-140K neighborhood. But now, in
light of the
ADP report, expectations have risen to the 150K-160K level.

IMF Completes Sale of $19 Billion Worth of Gold

Yesterday, the
International Monetary Fund quietly announced that it had completed the
sale of over 400 metric tonnes of gold to Central Banks and other giant

Thought it’s one of the biggest single sales of gold in world history, it
was largely ignored in the mainstream press.

Most remarkably, this record gold sale has had little effect on the price
of gold futures.

A Simple Explanation for Bond Yields

There are plenty of analysts and economists that
think QE2 is a bad idea. I’ve been one of them.

And even now, as economic data improves to the point
that GDP forecasts are moving higher, the Fed appears steadfast that the
economy needs more stimulus. The language in yesterday’s FOMC statement
was unchanged.

The inflationary risks of QE2 have been well
articulated by the anti-Fed crowd. And even though today’s CPI number
shows that inflation is not happening, it’s easy to interpret the rise in
bond yields as sign that inflation is right around the corner.