Sunday, January 10, 2010

Weekly Outlook 1/11


The SPX closed last week at new highs 1144. Nothing has stopped this market in awhile and while you gotta be conservative in expecting some kind of pullback soon there is no point in actually shorting it because its "overbought". That's just a word. Looks like it could be another gap up and run Monday as the commodities are pushing the futures tonight.Why try to stop this freight train? I say next stop is likely the 1168 area. But I see more of a slow grind up and a continued bleed lower in the VIX and volatility overall.

The move in crude oil has been powerful and appears to be led by the comeback in the Aussie and Canadian dollars going higher. Everytime it looks like the commodity trade may be topped out it surges so its anyone's guess what stops that train. Gold, silver, and copper are also on fire once again as the dollar takes a break and retraces a good part of the recent rally it has had since bottoming out in early Dec. I think this is a corrective move in the Euro back up before it resumes the new larger trend lower towards the 1.38 level eventually. Also the 10 yr T-note is near 3.8% as bond prices have been falling since Nov. These yields are nearing the 09 highs and once they break 4% get ready for a big move up in yields and headlines all over the media. It will be interesting to see how equities react to this if and when it happens.

This week is already Jan options expy as its a short cycle this month. Earnings season starts this week as well although the meat of reports isn't for a few more weeks. Even so, with this we could get a bit more movement this week in the markets.

Long>> AKS, CAT, PH, AMZN, NVLS, CVS

2 comments:

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