This is a terrible time for a weekend!
We finally got the party started, on Monday we strapped in for a rough ride, on Tuesday I had to tell the kids to calm down and wait for the launch while that nasty Fed went away, we ejected the whiners, we calculated our new trajectory (now that we had removed the excess mass), rolled our problems into next month, and yesterday, we fired up the engines and boldly set off where no market had gone before!
Who could have predicted that? Oh yeah, I did (pat, pat).
So we should end the week with a bang (hopefully not the bad kind!) as the markets have slingshotted into orbit and are heading straight to the moon! Inflation remains very tame with the CPI unchanged from last month but down to 2.6% for the year from a 2.9% peak in August.
If we can just ignore keep ignoring our amazing deficit for another month, we may safely enter a much higher orbit with our sites firmly on the 15,000 level for next year. This image sums up my premise for the week quite nicely:
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Private Note: By the way, I forget what day it was but I finally told Tom the Trader he was no longer welcome as I found his ridiculous panic mongering to be detrimental during what I considered to be a mild pullback. I hope you guys don't mind as he is only the second person I have ever done that to (the first was AA man, for profanity and general idiocy).
While I value contrary opinions, having some guy come on and BS about how right he is (absolutely untrue if you check his record) and then telling you to buy puts on everything and pointing to every little downward wiggle as more reason to bail was just too much for me to allow as I do feel some responsibility to all the newbies who read us and take that sort of thing seriously….
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Well Asia seems happy about it with pretty strong gains across the board as Japan is having a "soft landing" of their own and India picked up another 127 points as the Hang Seng seems determined to leave them all in the dust.
You can tell we're in a huge rally when the big web sites slow down and stockcharts.com is down at the moment and Yahoo is crawling! Europe has just been going up slowly but steadily all month.
- The semiconductor index has got to continue above 475 and need to get through 480 at least before the Nasdaq realizes it went out without its SOX.
- The transports (^IXTR, I finally found it on Yahoo!) have similarly left the Dow to it's own devices and a 3% gap is just plain scary!
China continues to take advantage of its growing power by taking the lead on energy conservation, now placing it on a more equal footing with Europe on the issue. Our own administation, on the other hand, is – oh forget it, you know what they are! Well I always wondered what it would be like to live in a third world country, perhaps we'll all find out for ourselves at this rate!
We will be talking about this on the weekend but since CNBC is pumping China's oil demand growth pretty much non-stop, I think I will remain the only contrarian left on the planet by pointing out that China's ENTIRE consumption of 8.5% of the world's oil, EVEN if it grows by 12% next year (double predictions) to 9.5%, could be almost totally wiped out by raising the average MPG of US cars from 22 to 33!
Way cool chart of global oil and natural gas flows from our friends at BP!
The low CPI number, coupled with China raising their exchange rate vs. the Dollar will actually hurt the dollar today so be prepared for anything with oil and gold.
We'll see if traders still want that last 124M barrels of oil to be delivered in January (you would think they need that much) and also, how high can February get with 278M barrels on order at $63.33.
Gold still needs to show us something at $630 but I'm taking that GG trade into the weekend as a safety net as well as some more DIA puts, especially if we get near 12,500 – a big psychological barrier.
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As the market is jumping today it might be a good time to lighten up ahead of the weekend, let's watch positions closely as, if they don't go up in this morning's surge, I'd hate to be holding them during a drop!
BDK gave a warning today so watch out for HD, SHLD, LOW and whoever else sells that kind of stuff – I may recommend taking it off on any weakness – check in comments, re. HD.
The NYX and the NADQ got permission to trade in China, that's a huge thing!
I'll we'll talk more in comments!
