The markets bounced back last week with a huge swing upward on Monday (as expected) and then began to lose steam through the remainder of the week.


Monday also saw the exchange chiefs called on the carpet by SEC chairperson Mary Schapiro. Unfortunately, we're still no closer to knowing what precipitated the previous weeks sell-off. Regulators are now looking at rapid sell orders placed by Wadell & Reed Financial as a possible contributor to accelerating the sell-off.


Retail sales came in stronger than expected at 0.4% increase. Even when you take out auto sales, the results were 0.4%. Most estimates were for an increase of 0.2%. We continue to get more positive readings on the recovery of the economy. Home sales are increasing, new jobless claims are decreasing, new jobs are increasing; all these things, while they seem to be happening at a slow rate, are great ways for the economy to regain its foothold and expand.

Gold continues to soar, topping out at $1,227.40 an ounce. With all the debt the U.S. (not to mention the rest of the world) is piling on, inflation becomes a serious threat to the global recovery.

Going into the May to November period, it's not unusual to see the market either trade in a sideways pattern or sell off somewhat. This is typically the time we see market activity slow down due to summer vacations and holidays. This is what appears to be happening now. We are seeing a few warning signs flash but as I have said in the past, we've seen the market pull back three times over the last year; we need to give it a little more room and time before we can determine if this is another one of those "healthy pullbacks to digest the gains" or the beginning of something more onerous.


So now what for Europe?


Obama called the president of the European Council last week pledging U.S. taxpayer bailout support to the PIIGS (Portugal, Ireland, Italy, Greece & Spain) for upwards of a trillion dollars.

While many believe this is necessary to help the global markets settle down, it concerns me that once again, the U.S. will be left footing the majority of the bill for someone else's largess. According to market strategist Bob Kendall, the U.S. is already the largest contributor to the International Monetary Fund. It makes it difficult to justify bailing out countries with some of the most generous pensions, wages & benefits, and working conditions in the world when our own economy is suffering. Kendall goes on to say, "...sort of like when NATO commits troops, guess who sends the most bodies?"