Saturday, December 26, 2009

Merry Christmas and New Year Thoughts

Merry Christmas all!! Hope everyone had a wonderful holiday. I will be heading out for a couple of days for a bachelor party and than a couple of weddings next week (one on New Years Eve and one on New Years Day). So won't be on here much if at all.

Next week should see the same as last week. No volume with a propensity for the market to drift up. That assumes no major overseas news.

Going into 2010 the first few weeks will be interesting. You have some extremes that will have to work themselves out. The equity markets are way overbought but so is the dollar. I would expect a correction (may have already started) in the dollar and correspondingly rebound in gold. The dollar push up has been mostly technical. The fear in Europe with Greece and Dubai caused a technical break out and than the end of the year is typically bullish for the dollar because financial firms want dollars to show that they are strong. So there is an abnormal high demand for dollars. This should correct though I think Europe will continue to cause problems in 2010 and so after a correction I would expect continued dollar strength.

The equity markets could see a pretty big sell off at the beginning of the year or they may just bounce around as the dollar corrects. Not really sure.

The inventory build that investors have been talking about for months as a reason to buy and have continued not to happen I think will finally happen in Q1. That means Q1 GDP could be legitimate and there could be some decent economic data.

Interest rates have already been going up and this could end the rally if this continues.

Should be an interesting few weeks.