Posted by: jhamon | January 5, 2010

MysteryHedgie: Santa Claus Rally Portends Positive 2010… So Far

Barring an unforseen drop today below SPX 1120.59, the Santa Claus rally (last 5, first 2 trading days of the New Year) barometer will forecast a positive 2010, as it did correctly in 2009, despite January 2009 being an awful month.

In the near term, more than usual attention is being paid to Friday’s US Jobs report; the improvement since the Holidays is expected to continue….What is not known is how asset markets will react to continued improvement, as many investors believe that healing is “all in the price”. We think that Friday and early next week’s reaction to NFP, especially if there is a large movement in the $, will dictate asset price direction for January and February.

Expect opportunities to appear, rewarding the nimble, over the next week.

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