Macro Outlook
There's still hope for next month's Durable goods figure. Regular readers will recall that the recent number was heavily supported by a spike in commercial aircraft sales.

My fear was that the lack of same in the next report would lead to a much diminished Durable Goods number. And since this is a widely watched report, this in turn would lead to a sharp drop in the market.

FedEx and Boeing are doing their level best to prevent this from happening:

“FedEx Corp. canceled its order for 10 Airbus A380 jets on Tuesday, the first customer to retract an order for the new jumbo double-decker plane that has been dogged by numerous delays.

“The world's largest express transportation company cited Airbus' production delays and said in a statement that its FedEx Express unit has ordered 15 Boeing Co. 777 freighters with a list price of $3.5 billion and taken options on an additional 15.” - AP

More tonight on the next DB, the Fed and inflation.

Market Trends
“What are your thoughts on Silicon Image Inc. (SIMG:NASDAQ)? They make the HDMI digital-to-digital adapter that is on all Digital TV's sold. They own the patent, so if your research is correct this company should explode. Any thoughts?”

Just like many of these digital and Internet companies, SIMG had a hard time post 2000 bubble bust. Its stock is only priced at $12.00 per share, and looks like it could fill in a gap in the short-term up to $13.63 per share.

SIMG's third-quarter results didn't come in so well, but the Needham & Co. analyst Charlie Glavin did say that, “with a dominant position in HDMI (high-definition media interface), Silicon Image is still a good stock with 20% to 25% upside that will leverage into the rising tide of HDMI penetration and a number of consumer product ramps in 2007.”

Over the long-term, SIMG could very well profit from the change in the television industry, and looks to be a $20.00 stock in the next year.

Trading Tactics
I can't imagine that President Bush woke up in a good mood today. All things considered, it was a sweeping victory for the Democrats, as they took control of the House after 12 years of GOP rule. What's still up for grabs is the Senate, which currently stands split at 49-49, and it'll be decided by the two tight races in Montana and Virginia.

As a result of this uncertainty, the markets opened lower on the day but have already come off their morning lows. In fact, an opening loss of around 50 points on the Dow has already been trimmed in half, which really shows you just how strong this market is. Will we once again close the day in the green? We shall see…

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