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ISM and POMO

|Includes: Costco Wholesale Corporation (COST)
If the ISM had the same reputation for its service data as it has for its manufacturing data, the Dow would be up 250 points. Be that as it may, this is a really uplifting session just days ahead of the jobs report. On that note, today's up session has more vigor than yesterday's down session, which felt more like indifference more than any urge to be out of the market. Services are 90% of our economy, so positive readings bode well. Moreover, today's report saw all of the key components move in the right direction, including the exports reading, which exploded to 58.0 from 46.5. Additional highlights include:

> Employment: 50.2 from 48.2
> New orders: 54.9 from 52.4
> Input prices: 60.1 from 60.3
> Imports: 53.0 from 50.5
The market is also getting a boost from the cheaper dollar, which seems to be lower for a variety of reasons. But, how long can it stay low if every other country on the planet is trying to lower their currency? This is a serious race to the bottom. I'm not sure what it means, but at some point we need equilibrium instead of trying to undervalue our currency too much.

The Fed is engaging in QE light, but many think Bernanke & Co. are going to put it into overdrive. Until then, it's all about POMO once again.
Today's operation raised $5.2 billion, matching the highest previous amount on September 20. On that day, the Dow opened flat and then rallied 145 points.
 
I love the action, volume looks much better; there is a real sense of urgency.
Ahead of the News: Can Costco Deliver Good News to Investors?
By: Brian Sozzi, Equity Research Analyst
 
Shares of Costco Wholesale Corp. (NASDAQ:COST) truly accelerated upon the third calendar quarter coming to an end, appreciating some 14%. For a large-cap retailer, the advance in the share price indeed has stood out relative to others in our sector coverage (the average gain for WMT, TGT, and BJ during the same time period was 3.2%). With Costco's valuation having become richer compared to comparable peers when applying forward earnings estimates (19.9x COST versus 13.3x for peer group), though admittedly close to two points shy of the five-year P/E multiple mean, it's imperative that 4Q10 earnings beat strongly, management declares 1Q11 consensus estimates as beatable, and that September comps continued the trend of acceleration since June.