Monday, December 28, 2009

Stock & Futures Markets Overview Near Year-End

Stock Market

Our stock market indicators remain relatively neutral. Our long-term models remain bullish while our overbought/oversold indicators are slightly bearish. Short-term models have kept us generally on the long side as the market continues to gently rise.

We have talked about the continuing rise in the markets with respect to the "Wall of Worry" as well as other contrarian indicators. At some point, we may give back some ground -- but we also believe that we might also see a melt-up (or freeze-up as some like to call it!) -- as shorts finally throw in the towel. During this sustained rise to recent highs, we have yet to see a +2%-3% rise.

Futures Markets

On the futures side, various markets gave back recent gains in well-entrenched trends -- so that trend-followers suffered a bit during December. This is part of "volatility" of futures trading; if it were too easy -- everyone would be doing it! However, good trading systems cut some losses short and will continue to follow the trends. Longer-term trends continue to be:
  • Long gold
  • Long energy
  • Short dollar
  • Long bonds
  • Long soft commodities like sugar, cotton, OJ, coffee
Wishing you a happy holiday -- and a happy & healthy 2010!

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