I hope you all enjoyed the Holiday break. The YM is still stuck in this 10,200 – 10,500 range while the ES briefly traded above 1125 before pulling back to the daily 13S. It should be interesting to see how the market starts the new year out as January tends to carry a lot of weight in how the market performs for the year. Years ending in “0″ tend to have early corrections with 2000 and 1990 being down years.
The end of the year, we saw the jobs numbers improve yet, once again, the market sold off. The market knows the risk involved if job losses continue to shrink – potential higher interest rates. Keep your eye on this as the USD will rise with interest rates while equities will be sold. If rates can remain low, however, the appetite for risk will still be there and equities will benefit. There could be a major short in bonds but those that jumped in early were burned.
Remember, as long as we have the Fed raising and lowering interest rates to extremes we will continue to have bubbles and busts. Markets are all about the creation of debt and the repayment of debt. We are creating a lot debt right now to pay for old, bad debt. No one knows how long this can go on but one thing is for sure - the market will sort it all out.
To Your Trading Success,
JM
Recent Comments