Courtesy of John Nyaradi.
Markets again shifted their focus off of Europe and continued the surge through Tuesday
Major markets continued to surge today as the Euro dollar rose (NYSEARCA:FXE), the US dollar fell (NYSEARCA:UUP) and Europe still remains intact.
Despite the late “Santa Rally” and a great “First Five Days,” we are still far from being out of the woods with Europe, and any distraction is a blessing as Team Merkozy and company will likely find another country in the region that is on the brink of default. The usual suspects of course include Italy, Spain, Greece, and France.
The US Economy, however, continues its tortoise-slow recovery as Wholesale inventories rise 0.1% (improvement?) and the NFIB Small-Business index which represents optimism for small businesses, increased yet again for the month of December.
The rush today was also spurred by major bank stocks’ rising; Bank of America (NSYE:BAC) led the pack by rising an astonishing 5.7%.
Lastly, Gold (NYSEARC:GLD) and Oil (NYSEARCA:USO) rose as well likely due to spurs in economic activity, and, let’s face it: Gold likely has nowhere to go but up after its most recent bloodbath last year.
Bottom Line: Our recent surge is likely due to relatively positive US economic indicators coupled with seasonal trends which include the “Santa Rally” and the “First Five Days” indicators. Europe, too, has managed to stave off catastrophe as well, adding to the illusion that we are out of the woods. As I said yesterday, Europe needs to keep containing its disaster and just maybe the bulls will be fueled by demand instead of hope.
Disclaimer: Wall Street Sector Selector trades a wide variety of ETFs and positions can change at anytime.
Copywrite Wall Street Sector Selector, 2012
Click here to learn more about John's book and for a free membership to Wall Street Sector Selector
