World markets were mixed overnight but generally calm.  The Dow will probably open up about 80 points this morning.  Despite the good news out of Libya, oil is not reacting strongly.  Only gold is showing any drama, back up to $1,880 again.

On the calendar, the most important item this week is Bernanke’s speech at Jackson Hole on Friday.  Bernanke has used this annual retreat to make major announcements in the past.  There is speculation that he will announce QE3, but I think that is unlikely.  The popular consensus is that he is impotent, out of bullets, and has a divided board.  Still, he has proven himself to be quite creative several times already.

Off the calendar, we remain vulnerable to the news flow out of Europe.  Merkel said the idea of Euro-bonds, guaranteed by all members to increase their bailout fund, is “not yet” ready to proceed.  She has been strongly opposed to this idea, and this could be a tectonic change.  Maybe, she is looking from a quid pro quo??

There could easily be a relief rally this week.  In a normal economic environment, stocks are deeply over-sold and ready to rebound.  In this economic environment, the absence of headlines are more likely to create the rebound.

Enjoy the calm . . . stop watching the stock market . . . do something fun!!