Courtesy of John Nyaradi
The bulls wasted no time getting out of the gate today on the strength of holiday sales showing a 5.5% gain and the best numbers in six years. More good news came from the ISM report climbing to 57 from 56.6 in November while construction spending was +0.4% compared to 0.7% in the prior month.
On the downside, personal bankruptcies rose 9% to 1.5 million in 2010 which was the highest since 2005 according to the American Bankruptcy Institute which expects a slightly higher number of filers in the coming year.
Technically, the markets remain significantly overbought and overvalued on a short term basis. The VIX remains at deeply below average lows, signifying major complacency in the markets, while further out contracts are priced significantly higher based on the expectations of higher market volatility ahead.
Wall Street Sector Selector remains in ”Yellow Flag” status, expecting choppy to lower prices ahead.
Wishing you a wonderful New Year,
John Nyaradi
Publisher of Wall Street Sector Selector
Click here to learn more about John’s book and for a free membership to Wall Street Sector Selector
