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Author Topic: Market Commentary - Dec 21, 2010  (Read 865 times)
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tamo42
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« on: 2010 Dec 21, 11:33:28 pm »



Today was very interesting for the markets.  There was highly correlated motion all across the board.  Essentially, wherever things started, they went up, spiking into the close.  This was true for the dollar, gold, silver, and stocks. Very strange to see everything moving together this way.

The only thing that makes sense of this to me is that money is fleeing the Eurozone.  There was more noise today that bonds issued by a Euro government (in this case Portugal) might be downgraded from their AAA status.  My guess is that people bought anything that wasn't the Euro or Euro-related.

Stocks were up 0.5% on the Dow and 0.7% on the NASDAQ.

Gold ended up 0.16% and silver ended down 0.31% (but still up from the open).

The dollar gained another 0.22%.

Notice how gold and the dollar both rose from the open to 10:30 and then from 1 pm to 2 pm. Very strong buying.

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« Reply #1 on: 2010 Dec 22, 12:01:32 am »

I haven't even looked at the markets, but my sense is that it's indecisive right now. It has unwarranted confidence, and it is feeling queasy about it.
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« Reply #2 on: 2010 Dec 22, 12:16:38 am »

What you might be sensing is that we are near/breaking the market highs established before the crash.  That sounds good except for the fact that the economy, as measured by how the average Joe is doing, is much worse than it was.  So why are these equities going up so much?

Like most real-life answers, it's several different things.  There is some actual optimism out there (misguided though I think it is).  The dollar has gotten weaker, so the counting units are smaller.  My main speculation though is that banks/investment houses are taking their excess reserves and putting them into the stock market instead of making loans.  Because there are relatively few players actually supporting this rise, it could fall apart very quickly. 

For now though, things are looking to head up.

This is why you have to be a market agnostic though.  The old buy-and-hold mentality may work over some spans of time, but not others.  You have to be able to look at the market and say to yourself "it's going up, time to go long" or "it's going down, time to go short" regardless of your philosophical or political thoughts on the matter.
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« Reply #3 on: 2010 Dec 22, 12:38:48 am »

Hmm, all that cash going into the market sounds very much like a bubble, considering the greedy players doing it. They're likely to sell, rather than hold, so with everyone looking for a quick profit from free government cash, it's likely to perform poorly for everyone, against the hopes of the herd pushing it.
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« Reply #4 on: 2010 Dec 22, 04:33:08 pm »

i belive that in 2011 arround middle, we will see a big crash!!!! The economics is in a bad situation but people are talking it nice and a light bubble is coming up in my eyes. I (hope) think the crash is coming. Thats also why Cash is King in 2011 will be the keypoint to grab your chance. Thats just what i think, dont know if anyone agrees.
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