Communications from ARA MELKONIANS/ Week of September 27, 2010/ Update #3

Good Morning Everyone and Happy Wednesday! Yesterday was one of those odd days when the stock market closed up, all 3 major indices closed in positive territory, commodities rallied and credit markets improved. It was pretty much green all the way across the board. Markets are flat this morning after equities have recouped early losses, and credit markets are giving back about 1/2 of their gains from yesterday (interest rates worsening).

In fact, Gold finished up $9.70 to $1,308.30 an ounce and hit an intraday high of $1,311.80. Silver reached its highest price since 1980, settling at $21.707 an ounce, up 23.6 cents from Monday. Gold is up 4.6% this month and 19.4% on the year. Silver is up 11.9% on the month and 29% on the year. Some might see this continued buying of commodities as a sign of investors casting their vote for a double dip recession next year. Certainly, sovereign banks are preparing for the worst as they are the major purchasers of gold at this time.

Today's economic calendar is light, but there are several Fed speakers on tap today and markets could jitter in reaction to any comments made that could signal future FOMC policy decisions. The end of the quarter is tomorrow, so don't look for any drastic sell offs. Fund managers will want to keep these gains in place for their quarterly bonuses. What will happen in October? What usually happens in October after a strong September? We'll see if we get any major market corrections this year, but it sure seems likely.

I hope you all have a terrific Humpday and a very profitable and productive rest of the week!