Following a week away enjoying the challenges and wonders of golf in British Columbia's Okanagan Valley, where we noted from afar the continued gut wrenching gyrations of the U.S. housing and banking sectors, along with the long anticipated correction in crude oil, we came back to find that for the 29th week of the year, the Dow Jones Industrial Index had actually gained 3.56%, with the S&P 500 Index ahead by 1.78%, and the NASDAQ Exchange up on the week by 1.97%. To the north, the oily TSX Composite Index was off by 1.41%, and the TSX Venture Exchange had given back an additional 3.89%. Two of the few new 52-week highs last week on the TSX were Cinch Energy (CNH-T) at $2.10, and IMAX (IMX-T) at $8.32, while some of the many new

52-week lows were Aquiline Resources (AQI-T) at $6.16, Harry Winston Diamonds (HW-T) at $19.66, and Sleep Country Canada (Z.UN-T) at $16.22.

This brings the number of consecutive down weeks on the Canadian exchanges to.five for the TSX Composite and.seven for the TSX Venture Exchange.

Credit Suisse points out that even though crude oil has corrected down to about US $129 a barrel, the price of black gold is still some 30% higher than its previous peak.

Under the heading of 'Stealth Rally' - Gold bullion at US $958 an ounce has quietly advanced to within $45 of its all time high of US $1004 established last year.

Under our continuing heading of 'A Billion Here And A Billion There And Pretty Soon You're Talking About Real Money' - The American markets posted a late week rally after banking giant Citigroup (C-N) reported a less than expected 2nd quarter loss of U.S $18.65-billion.

RBC Capital Markets - "The common wisdom on Wall Street is that Fannie Mae and Freddie Mack are too big to fall. The concern longer term is how much can the U.S. government take on?"

National Bank Financial - "We've got a rotation out of resources into financials and other sectors that have been beaten down."

And on a related note, Google (GOOG-Q) share's dropped by $52.12, or 9.77% to

US $481.32 a share when the world's largest search engine reported less than expected 2nd quarter earnings of US $1.25-billion.

Last week ended on a down note when IndyMac Bank operations are taken over by U.S federal regulators after the mortgage specialty bank reports it is under equity on

US $32-billion of assets.

And then on Monday, July 21st:
The previously flaming hot junior coal stocks have their fires put out as Goldsource Mines (GXS-V) shares drop $6.75 or 52.94% to $6.00 when the sector leader reported less than expected drill results from their Border coal property near Hudson Bay, Saskatchewan.

The price of TransAlta (TA-T) shares jump $4.86 or 15.07% to a new 52-week high of $38.10 after the Alberta bases electrical utility are offered a proposed $39-a-share takeover bid from U.S. bases LS Power Equity Partners (Luminius) and global Infrastructure Partners (GIP-N).

With a further sign that American consumers are keeping their wallets in their pockets, credit card giant American Express (AXP-N) reports that 2nd quarter sales fell by 9% to US $968.4-billion.

Jacqueline Kennedy Onassis - "If you bungle raising your children, I don't think whatever else you do well matters very much."

Technical analysts David Harder & Ron Meisels - "While market strategists reduce equity weightings and more and more investment experts turn negative on equities, a host of indicators suggest that conditions are ripe for a bottom to occur at any time."

Tuesday, July 22nd:
Monday's mixed day of trading only managed to produce 7 new 52-week trading highs and a much larger 59 new 52-week lows. Two of the interesting new highs were Daylight Resources Trust (DAY.UN-T) at $13.32 and Red Back Mining (RBI-T) at $9.25, while some new lows of interest were Danier Leather (DL-T) at $5.99, HudBay Minerals (HBM-T) at $10.60, and Transat A.T. (TRZ.B-T) at $18.10.

Under our continuing heading of 'Tough Crowd' - The share price of Apple (APPL-Q) remain almost unchanged at US $166 even though the computer company reported that 2nd quarter Macintosh shipments increased by 41% to 2,296,000 units and their world renowned iPod shipments increased by 12% to 11,011,000 units.

David Brooks - "People don't change when they see the light. They change when they feel the heat."

Wednesday, July 23rd:
A market that won't go down on bad news is probably going to go higher, as was the case on Tuesday for the American exchanges that posted convincing rallies in spite of much less than 2nd quarter reports from Wachovia Bank (WB-N) and Washington Mutual (WM-N).

U.S. Treasury secretary Henry Paulson on his governments decision to provide up to US $25-billion to support beleaguered mortgage providers Freddie Mac (FRE-N) and Fannie MAE (FNM-N) "Now, more than ever, we need Fannie and Freddie out there, financing mortgages."

To the north, a further pullback in the price of crude oil and gold bullion left the Canadian market feeling very timid and Canaccord Capital's Morning Coffee only able to produce 4 new 52-week trading highs along with 58 new lows. Two of the notable new highs were Augusta Resources (AZC-T) at $6.96 and Royal Gold (RGL-T) at $37.37, while some of the many new lows of note were Atna Resources (ATN-T) at $0.59, Coxe Commodity Strategy Fund (COX.UN-T) at $9.25, Shore Gold (SGF-T)at $1.88, and Wi-Lan (WIN-T) at $1.59.

A large part of yesterday's U.S. market rally came from the country's many airline stocks that saw the Amex Airline Index climb by over 20% from a deeply oversold position, as airlines are the biggest beneficiary of lower crude oil prices.

Notley's Notes - 'The first short term recovery bounce signalled last week after nearly two months of steady decline..Currently, the banking sector which has been the leader to the downside and the most oversold, is responding with the greatest vigour."

And similarly, Canaccord Capital's Chief Portfolio Strategist Nick Majendie - "On a short term basis, we are quite encouraged by the recent market action. Just to mention a couple of the short term indicators we follow, the ratio of bears to bulls in the American Association of Individual Investors last week matched the level of October 2002 while the VIX, (Volatility Index), was again over thirty Both are excellent precursors to decent rallies."

Under our continuing heading of 'Official Inflation' - Statistics Canada reports that surging gasoline and grain prices caused the county's Consumer Price index (CPI) to rise to a higher than expected annualized 3.1% in June, well above the 2.2% rate recorded in May.

Natural gas production from the North Slope of Alaska comes one step closer to reality after that states legislature votes in favour of awarding a license to build the much anticipated natural gas pipeline to Canada's TransCanada Corp. (TRP-T).

A report by Capgemini finds that Brazil's red hot stock market has led the number of millionaires in that country to rise by 19.1% last year to 143,000.

Thursday, July 24th -
Wednesday's continued correction in commodities weighed heavily on the TSX and as a result, today's Canaccord Morning Coffee is only able to report one new 52-week trading high along with a disappointing 65 new 52-week lows. The lonely new high of the day was Xantrex Technology (XTX-T) at $14.89 while some of the many new lows were Baja Mining (BAJ-T) at $1.08, Cargojet Income Fund (CJT.UN-T) at $7.00, FNX Mining Co. (FNX-T) at $17.01, and Sprott Securities (SII-T) at $8.00.

Cargojet Income Fund (CJT.UN-T) loses altitude in a hurry as the Canadian overnight air cargo carrier share's drop by $2.31 or 23.69% to $7.44-a-share when the company warns of lower than expected 2nd quarter results and delays in deliveries of new and more efficient cargo jets.

Technical analysts Olaf Sztaba & Ron Meisels - "One of the biggest disappointments for investors in the past few years was the mediocre behaviour of gold stocks in relation to gold itself. This is most likely to change..Technically and cyclically, gold stocks are ready to take a leading role."

With figures that confirm they are firing on all cylinders, BHP Billiton (BHP-N) reports that in they last year, the multi commodity producer has achieved record production for alumina, copper, iron ore, manganese, and molybdenum.

And on a related note, a study by the Metals Economics Group finds that copper found through exploration is not keeping up with copper produced as in 2005when 15-million pounds of copper was produced while only 13.5-million pounds were found. In 2006

15-million pounds were produced and only 13-million pounds were found. And in 2007 15.5-million pounds of copper were produced and a much lesser 7-million pounds were found in the field.

Friday, July 25th, Short Strokes:
Thursday's triple digit drop into the abyss left Canaccord's Morning Coffee unable to find a new high on the TSX although there was an unsettling 68 new 52-week new lows. Some of the notable new lows were Alexis Minerals (AMC-T) at $0.49, Harvest Energy Trust (HTE.UN-T) at $19.72, Lundin Mining (LUN-T) at $4.85, and UEX (UEX-T) at $3.14.

Aurelian Resources (ARU-T) shareholders were some of the very few to have any market joy as their share price rises $1.94 or 43.60% to US $6.39 on a takeover bid by Kinross Gold (K-T) in order to get access the very rich Fruta del Norte gold project in Equator.

Ford Motor Co. (F-N) shares drop 92-¢ or 15.26% when the beleaguered automaker reported a record 2nd quarter loss of US $8.7-billion.

This week, Ford Motor Co. (F-N) is taking some time from its current corporate problems to celebrate that this is the 100th anniversary of the company standard 'Model T' which began production in 1908, and leading historian John Heitmann to comment - "The Model T was likely the most important vehicle in causing social change in America."

The U.S. National Association of Realtors reports that the median price of an American home in June has fallen 6.1% in the last year to US $215,100.

Statistics Canada confirms that the provinces of Saskatchewan and Newfoundland & Labrador are no longer to be treated as economic drags on the Canadian economy by stating - "These two provinces have moved beyond old stereotypes and stepped into a new era of prosperity."

While we were away last week, and while most commodity prices were in freefall, the price of Aluminum rose to a new record high of US $1.47 a pound.

For the Week

The DJII lost 126 points to 11,371, the S&P 500 lost 3 to 1,258 the TSX lost 131 points to 13,385, the NASDAQ gained 28 to 2,311, and JVX lost 111 points to 2,188.

Gold lost $28.50, to $929.50, Silver lost $0.77 to $17.43, and Oil lost $6.13 to $123.34. Natural Gas lost $1.53 to $9.11, and Copper lost $0.06 to $3.61.

The CRB Commodities Index followed oil& gas, precious metals, and most base metals, along with soft commodities lower to lose 14.95 points and end the week at 412.22.

The Canadian dollar lost 0.6¢ against its US counterpart to end the week at US $0.9808. The Euro lost 2.1¢ against the greenback to end the week at US $1.5697.

And Finally -

And finally, the Interagency Task Force on Commodity Markets, after spending much scrutiny and no doubt taxpayers money, has concluded that speculators and other factors such as price fixing had no real bearing in the recent sharp rises in energy prices and that "Supply-and-demand factors best explain the recent surge in crude oil prices."

Interesting times, and...thanks

Rod and Manjeet

(604)643-7567

www.rodblake.com

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