Colin Twiggs' has signalled an alert to the possible impact of rising bond yields.

From late October, it was my contention that the Fed intervened by putting liquidity into the system to push equity and bond markets higher through the year end.

Starting early December, I believe the reverse has occurred, which, at some higher level of yield on the 10-year Treasury Note, say 5.0 pct, will negatively impact equities, as Twiggs implies.

I have been suggesting that the Fed will try to keep that yield from rising as fast as the market would like, and that will help gold. If the yield rises very quickly to say 5.25 pct and above, that would kill both the gold market and the stock market and leave the bond market in shambles.

In any event, as soon as the equity market starts into a Bear led by financials and utilities, I think the Fed will start to drop rates. But by then it will be too late. Everything will fall for a while. Gold will be the last because the USD is headed for serious downside action this year.

Yes, like the British did this week, I believe that the European Central Bank and the Bank of Japan and the People's Bank of China will raise rates in the next six months.

Recent economic data from the U.S. has been stronger than anticipated, and the weather has turned much colder. Besides OPEC will take drastic action to prevent oil from trading in a new range, say 40 to 50 rather than 50 to 60.

So I don't see much more downside pressure on the oils and base metals (copper, nickel and zinc).

LG Philips took a serious loss caused by pricing wars in the big screen TV market. I'll believe that particular industry price war is over when I see tiny Genesis Microchip (GNSS) trading back in the $15 range. GNSS, which supplies video chips to the big screen TV manufacturers, hot $9.41 last Wed, before closing at $9.70 on Friday. Right from the end of October, it's looked like orders for 1H07 have dried up.

AMD's similar price cutting strategy against Intel in the broader semi-conductor industry also failed, and Intel, which reports after the close today, will show the impact of pricing issues this year.

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