It seems everyone has decided we will behave like last year in January and get a correction. You know how I feel about "everybody". The correction could very well be happening now and we could rally in January. There is strong put support at DIA 107 and QQQQ 40 and 41. Bullish scenario? The Feds could signal they are done on Jan 3rd, and you better not be short if that happens. I'm not sure that will be the case, but even if they signal only one more hike, markets will take off. There is now enough weakness in the economy and housing for feds to consider a pause. I think they better do so, otherwise, the inverted yield curve will mean something. In any case, an inverted yield curve has always, at 100% accuracy, predicted a slowdown in corporate profits. So it may not signal a recession, but it does tell us profits will lighten up.
This entry was posted
on Wednesday, December 28, 2005 at 4:24 PM.
