The S&P 500 index spiked to a new 2009 high over the 1,100 level but the market was unable to hold its highs. Overall stocks are enjoying another widespread rally. Comments from a few Federal Reserve officials about keeping interest rates low helped push the U.S. dollar to a new 15-month low. This is powering gains in the commodity sector and gold has hit a new all-time high. Generally positive manufacturing data out of China also helped set the bullish tone this morning.

Asian markets were mixed. A rising yen put pressure on Japanese exporters and the NIKKEI index barely closed in positive territory. Investors ignored stronger than expected machinery orders. Economists were expecting orders to come in at +4.1% for the month. The Cabinet Office in Tokyo said Japanese machinery orders surged +10.5%. Further east the Chinese Shanghai index posted a minor loss snapping an eight-day winning streak with a 0.11% decline. Yet the Hong Kong Hang Seng index surged 1.6% to a new 15-month high. The Chinese government released several economic reports today. The country's trade export surged to $24 billion. China's factory output soared 16% to a 19-month high in October. Yet the good news was tempered by a significant decrease in lending by Chinese banks.

The rally in European markets continued on Wednesday. Weakness in the dollar is fueling gains for the commodity and mining-related stocks. Financials were also showing strength. Britain's employment data showed job losses fell to their smallest levels in more than a year. The Bank of England's governor said he was still opening to additional quantitative easing if it was necessary. The English FTSE rose 0.69%. The French CAC-40 gained 0.7%. The German DAX rallied 0.98%.

Today's market seemed to be all about the U.S. dollar. There has definitely been a strong inverse correlation between a falling dollar and rising stocks. Today's new 15-month low in the dollar has sent gold to a new all-time high near $1,115.00 an ounce. Naturally the mining stocks are showing strength. The only sector showing more strength than the gold stocks were the homebuilders. A better than expected earnings report from Toll Brothers (TOL) sent the DJUSHB home construction index to a 5.7% gain.

Speaking of earnings announcements investors have been hoping for good news from the retailers. Macy's (M) reported this morning. The company beat Wall Street's estimates but management warned for the fourth quarter and lowered guidance. Shares of Macy's are down more than 8% on the session. Tomorrow morning will bring a key report from retail titan Wal-Mart (WMT). Analysts are expecting Wal-Mart to report a profit of 81 cents a share.

Currently the S&P 500 index is up about 0.3% at 1096. The high for the day has been 1105. The NASDAQ composite is up 0.4% but it's retreating from its highs near 2180. The Dow Industrials hit a high of 10,341 but it too has trimmed its gains. The small cap Russell 2000 index is up 0.49% but it failed to breakout over resistance near the 600 level.

Let's take a quick look at charts for the major averages:

Chart of the S&P 500:

Chart of the NASDAQ:

Chart of the Dow Industrials:

Chart of the Russell 2000 index:

After scanning the OptionInvestor.com play list I see that the GLD gold ETF has hit our first target at $109.50. Traders with November calls will want to consider selling their entire position. The IWM has produced another failed rally under $60.00, which could be used as a new bearish entry point. Shares of biotech stock BIIB are showing strength and readers may want to consider an early exit from our put play.