Stock Preacher

Savvy stock market strategists are seeing the up arrows as the Big Q on the Street is: how much further the Bull can Charge before it stalls and lays down?.
Some traders believe a pullback has got to come and that this week is as good as any for that to happen, because of the low trade volume of trading, but others, many others several strategists say in notes they see stocks moving higher warning the naysayers could be proven wrong, and that this could be the beginning of a new Bull Market and a above average one at that..
Goldman Sachs strategists said they see progress on a number of economic fronts and are now boosting their exposure to cyclical stocks. Laszlo Birinyi says, if you look at history, it looks like the market’s still moving higher.
Citigroup’s Levkovich, chief U.S. equities strategist, said the investment community is “almost shocked” by the near 30 percent rise in the S&P 500 since early March, and that the case is building for a second half of Y 2009 recovery, that many investors are ignoring the fundamentals and following only the technicals in here.

Since early March, financials have risen 74%; cyclical consumer discretionary are + 46%; industrials gained 44%, and materials are up 41%, as the defensive sectors are under-performing. The move higher in the stock market is boosting US consumer confidence. For that reason, the market is seeing much better that average movement higher. A Key factor is that there are many of investors who missed the moves and are sitting with large cash hordes, about US$9.2Trillion.

Laszlo Biriniy says the market’s 53-day gain and 10 percent move above the 50-day moving average are second only to the market’s performance in 1933. He also says in a note that the net advances over the past 10 days are the third strongest in market history, and he makes a case for even more gains.
Brown Brothers Harriman’s Brian Rauscher, a long-time Bear turned Bullish in early March. He was concerned last month that the market could be showing signs of moving too far, too fast. But last Friday when asked does he think the market will go higher. He answered: “May have take a deep breath to get through 900 (a day or so), but this market is moving higher.”

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Asian shares rose last Friday, with South Korean stocks hitting a 6-month high after the country averted recession in the first quarter, as a Wall Street rally boosted risk demand around the region and dented the yen. Many financial centers were closed for a long weekend, making investors nervous that gains made may not be sustained next week when many major US companies report quarterly earnings. The Nikkei hit a three-month closing high for the second day in a row, though off the day’s peak reached above the psychologically key 9,000 level, as banks tumbled after Sumitomo Mitsui Financial Group warned of a net loss for the financial year just ended, reviving fears for other megabanks.

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This is what happened last week…

Last Tuesday began what the world community views as a major event in US history, the inauguration of Barack H. Obama as its 44th President and its 1st Black American President.
Some of President Obama’s executive orders on his 1st day in office:

1. A freeze on salaries for White House staff earning $100,000 or more, about 100 people in all.

2. New Freedom of Information Act rules, making it harder to keep the workings of government secret.

3. Tighter ethics rules governing when administration officials can work on issues on which they previously lobbied governmental agencies, and banning them from lobbying the Obama administration after leaving government service.

The week in the markets, however, continued to be bathed in the glow of uncertainty within the financial sector and coupled with Qs about the timing of the economic recovery.
Couple that with headlines announcing that China’s Y 2008 Q 4 GDP contracted from 9% to 6.8%, the UK reporting a GDP decline of 1.5%, the largest since 1980, US housing starts fell to their lowest level on record, and initial jobless claims returned to Christmas levels, matching the 26 yr. high of 589,000 set in December 2008.
Though Microsoft disappointed, IBM and AAPL rang the bell with GOOG beating too, and coming in better than expected.
Read more

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Global Gold and Silver trading posted record activity since the start of the credit crisis, according to the Bullion Markets 2009 report published in London last week by the International Financial Services London (IFSL). Gold turnover increased 58% in 2008 to a record US$ 20.2 T. Silver trading increased 39% during the year to a record US$2.6T. The traditional “safe-haven” appeal of the precious metals has attracted many investors to this asset and the growth in turnover was partly due to an increase in prices of precious metals during the year with Gold posting an all time high in March of US$1,011 oz. According to the report, the OTC market accounted for nearly 75% of Gold trading and 56% of silver trading. Most of this activity was transacted through the LBMA (London Bullion Market Association).

Daily reported net trading in Gold on the LBMA averaged US$20B in the first 11 months of 2008, up 45%t on the same period of 2007. Daily trading in silver on the LBMA increased 32% to US$2B. Futures and options trading of Gold on exchanges increased more than 80% in 2008 to a record US$5.1T, according to the report. Trading of silver increased 60% to a record US$1.2T. Exchange traded Gold and silver funds have been the strongest source of growth in demand since their introduction in 2003. Comex in New York, MCX in India and Tocom in Tokyo account for most of the exchange traded activity.

Investors who know their history are moving into Gold. They know that in the last few years of the 1970s, the Gold mining sector featured quadruple digit share price gains as Gold shot North. With the same economic conditions prevailing now, it’s not unlikely to see the same happening once again.

Bottom line: US$800 oz Gold may turn into $1,300 oz Gold in the foreseeable future. Scarce, precious metals like Gold have become sought after investments following the huge sell off in equities. Many Gold Bugs and value analysts are predicting a major Bull Charge North in Gold, and that is has already begun.

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Last Friday all the market indices closed above their 50 day Moving Averages for the first time in several weeks signaling that the Bull regained the momentum in the closing sessions of last year and the opening sessions of this New Year, and they are now above what has been intermediate term resistance.

The market went up on low volume over the last three trading days, so we have to see what happens when the markets resume in earnest, and that should be the week of January 13. Lots of Bears have been out playing in the Snow, and when they come back to town they likely will take another swipe at the markets and send the S&P back to the line, the 20 DMA, 885, on a retest. If there is a decent recovery off of that retest, then more optimism will be in the air. A reminder, historically January is a quixotic (irrational and not predictable) market month, also it is the Year of the Ox (Bull) and the US will have it’s new president in office on January 21.

Stay tuned…

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Below is the Forecast from one Chinese Astrologer that I read.

“The global economy will begin to recover from the financial meltdown. 2009 is a year of opportunities with the emergence of many new global empires.

Under the new administration of Barack Obama, Obama is a self element earth person, the Wall Street stock market will recover faster than expected as Barack Obama enters his peak luck cycle, as the world’s major economies put aside their differences to overcome this current financial crisis.

The full impact of the unison will be seen in the second half of 2009.

The property market of United States will continue to recover as 2009 is the Year of Earth.

Employment statistics will improve as US job market bounces back from the financial meltdown. This will lead to an improvement of the world’s stock market, as many major corporations will undergo restructuring or even a change in leadership.

All the best in 2009, the Year of the Ox, Charge!

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