I have not written an entry in a bit. Today is the last trading day of 2010. As I write this, Dow Cash is bumping up against 11,600, S&P cash is bumping up against 1260. These are the highest levels since Oct 09, a fact that has been trumpeted far and wide by the “new” bulls who are waking up after hiding under rocks since the July 4th weekend this Summer.
S&P cash looks like it will run at 1280 and then 1300. If we get a surge of money jumping back into the markets in Jan we should head for those targets. There is so much money sitting on the sidelines. At some point, like proverbial lemmings, the fact that the missed the last 5 month rally will be so painful they will have to say “uncle” and dive back in. Its just human nature.
Dow cash has upside resistance at 11,800, and then the “magical” round number of 12,000. Dow printing 12,000 could be the trigger that sets off a new round of speculative buying.
One caveat, generally, you should sell into strength and buy weakness if you want to be successful trading. You have to be heading the opposite way of the crowd, I believe, to successfully survive the temporary delusions and madness of crowds.
Right now, the whole world has re-discovered commodities. It’s 1973 all over again. Be Ware, is all I can advise.
Its 11:16, and we have corn, and beans trading at their highest prices of the year, and the highest prices in 2 years. The wheat is still the weak sister, and i wouldn’t want to get long until we settle March wheat above 8.00
January 12th there is a USDA final crop report from 2010. This is a huge number. We may rally right into that number. Higher prices will bring out farmer selling eventually. Six dollar corn, 14 dollar beans and 8 dollar wheat are historically very high prices.
We have cotton at record highs as well, although we have pulled back off of our recent all time highs. gold is hovering at the 1400 level, with bulls still eying a run at 1500. Silver has rallied 2 dollars back to the 30 dollar level and is currently making new highs approaching the 31 dollar level. I don’t see any real resistance for Silver until the 34 dollar level.
I am pretty sure the first quarter’s mass media will once again fall in love with and start touting gold, silver, and in general all commodities as a hedge against inflation.
I am friendly these commodities as well, but I am eying the exits. If you get long, have your sell stops in place.
That is all.
Happy New Year and thank you for you interest in my blog this year.
Looking forward to a happy and profitable 2011, no matter which way the markets move.
