This is the year end wrap-up and I am going to include a few bonus insights into next year's trade.
BUT, before I jump into things, SNOW is in the forecast! I have had enough groomers for a while and I am ready (with my Rossignol Phantom 97's) for some serious powder! We have been in a warming/high pressure trend over the Wasatch and it looks like it is about to break!
Speaking of TREND!! We were trend down in 2008 and trend up in 2009. What will 2010 bring for the markets? Let's take a look at a chart of the SPY:
We came off the bottom in March with help from the Fed and as you can clearly see, have just surpassed the 50% retracement mark, with full steam ahead towards the 61.8% mark. There is a peculiar trend line coming in, but the markets seem to have MORE recovery on their minds.
A few other charts that show a similar trend: AAPL in the tech sector, the retailers and of course, the commodities!!!
The trends we saw were up (unless you are talking about the dollar). The financials were up (but are starting to lag). Is this a precursor to the rally running out of steam as financials tend to be a leader?
So aside from the dollar and the financials lagging, it was a VERY robust rally from March to December. The job market improved (some of you may not think so) says the Labor Department. Consumers spent money (or credit).
Do you hint at sarcasm? There shouldn't be because the local barista, Park City Coffee Roasters are now brewing 6 days instead of 5. Those microeconomic factors say that people are spending money and life is great.
Onwards and upwards into 2010 as most optimists say it will be BETTER than 2009.
A question: How much has your portfolio gained since last year? Some returns are 50% plus - just by holding on to your positions! Astounding!! It would be nice if we did that again (which means the dow is closer to 15000, but I am not going for it.
I believe we are going higher before we go lower, but not MUCH higher. That's it, I said it. Enough is enough as Park City has 65% of its rooms full during Christmas week (microeconmics in a resort town).
We have higher taxes on the way, unemployment that is in an uptrend (or at least sideways for a while), (I won't mention terrorism), and PHENOMENAL growth. No one should be complaining about their portfolio versus a year ago and if it goes sideways or even down a little bit, hallelujah - another buy point (which have been very hard to come by of late!).
I see the Dow going towards 11,500 at the very highest (I don't think it will make it) and then going sideways to down a little bit. I originally thought a double dip was likely and still give it an OUTSIDE shot. The higher we go, the less likely that double dip seems.
Regardless of my prediction or any other out there, volatility should increase by the start of the 2nd quarter and opportunities will be abound. So whether you read my predictions or listen to any others, it shouldn't matter.
Why?
Because YOU should have a sound trading/investing plan. Don't have one? Don't know how to make money in a neutral to down market? Don't know how to protect your stocks, mutual funds, 401k, IRA? Well, you better learn because we aren't trending up forever!!!
The bottom line is, if the markets continue to go up, traders will suffer, but portfolio holders are happy. If the markets start to gyrate, traders will reap it in. Wherever you fall, there will be money to be made.
Happy Holidays, Happy Trading in the New Year and Be Environmentally Cool by wearing Locals Have More Fun apparel!
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