1/3/11…in with the new

…welcome to twenty-eleven! Twenty-ten went out with a whimper not a bang as the continuation of low volume and lack of market action set the stage for doldrums at the highs. But the new year might be different as Globex futures are rally strong overnight while the dollar and bonds sag…gold and crude benefitting though. Here is the volume for the final two weeks of the year…not even close to average!

12/17 2.02B – Quadruple witching! Highest volume since 6/25/10

12/20 829M

12/21 811M

12/22 784M

12/23 617M

12/27 468M – 2nd lowest of 2010, 11/26’s 428M was THE low of year and 3rd lowest since the 12/24/09 319M day which was lowest in decades!

12/28 560M

12/29 520M

12/30 508M

12/31 592M

The story on Illinois $13 billion deficit…and TB’s postscript on Minnesota’s $6.2 billion…doesn’t paint a pretty picture for the year however…nor do corporate profits without jobs…or at least not full-time with benefits…instead the subsidies are going to hiring abroad…nice, huh? Of course, those aren’t the only two states with problems as we all know…just the headlines du jour.

So where do we go from here? The new Congress opens with the GOP controlling the House while the Senate remains in stalemate. Listening to the talk shows Sunday was not enlightening as the GOP now wants to return to 2008 budget levels, revoke the unused stimulus funds yet how they are going to accomplish this remains to be seen…and what IF we double dip? Without jobs and people back to spending beyond their means for the holidays…isn’t that obvious when spending is surpassing earnings growth? Apparently not. Ah, and another poll shows more than 50% of Americans believe the country has seen its best years…except for those hawking stocks of course…and the CEO’s and Wall Street who don’t seem to feel any pain whatsoever. How do you spell dichotomy???

Well, as mentioned last week, the ‘January effect’ is all the buzz and since the first trading day of last year was such a monumental success (Dow +155), they are going to attempt it again…of course we were nowhere near the levels we are at now (Dow 11577 vs 10428), so will we have a repeat of 2010?

That is of course a two-sided question: will the returns replicate? – will the VOLATILITY replicate? The latter seems a certainty, but as to the former it is doubtful we can achieve the same kind of growth…and if jobs don’t materialize soon…

Anyway, enjoy the first trading day of twenty-eleven…hopefully!

. . . - - - . . .    . . . - - - . . . (S.O.S.)

Hope you all had a wonderful New Years and that twenty-eleven is a banner year for all of you,

TB

Trader Bill thinks it is clear to anyone reading these missives that they are merely commentaries...as he sees it...and do not necessarily reflect the views of anyone other than his own. Information is gathered from sources he has found reliable, but no guarantees of accuracy are implied. These are merely observations of events in the marketplace offering in an attempt to offer a non-mainstream viewpoint. Copyright TBD Capital LLC, January 3, 2011.

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