Game plan for year end at this point would be to either stay in cash, or wait a little longer for a post Christmas rally into first two days of January and exit, the "real" so-called Santa Rally. The coming pre-Christmas week could see weakness, but beware of Friday which could be bullish as traders anticipate Monday 26th. On November 1st, I mentioned that the rally would not find much upside after Thanksgiving and so far that has proven correct, at least for the buy and hold crowd.
The chart of VIX relative to SPX I posted yesterday is not to be ignored. Bonds are seeing their traditional Christmas rally, but again, lots of fundamentals colliding with seasonal plays, which never lasts. Fundamentals will always win in the end and rates are going up at least another 50 basis points.
As for Gold, it could very well go in a freefall if rates go up to neutral or above. Be careful there as well in January.
The chart of VIX relative to SPX I posted yesterday is not to be ignored. Bonds are seeing their traditional Christmas rally, but again, lots of fundamentals colliding with seasonal plays, which never lasts. Fundamentals will always win in the end and rates are going up at least another 50 basis points.
As for Gold, it could very well go in a freefall if rates go up to neutral or above. Be careful there as well in January.
This entry was posted
on Sunday, December 18, 2005 at 11:20 AM.
