The stock market basically chugged higher Thursday on fairly low volume. With the Christmas holiday over the coming weekend (in case you might have forgotten), trading should be subdued on Friday, too. The big beneficiaries of trading were Caterpillar and AIG, both of which are in the Dow Industrials. They were both identified by separate firms as being among the top picks for the coming year. Credit Suisse First Boston picked CAT and Merrill Lynch named AIG, both being up substantially on that news. On the other hand, GM retreated again on Thursday and dropped over 2%.
In other markets, natural gas futures dropped almost 10%. Gold was up almost $8 with the HUI trading up over 11, looking to make a new annual high in that index. The news in the gold complex was Barrick Gold’s (ABX) hostile takeover bid for Placer Dome Inc. This kind of merger news can have some speculators lathered up for other takeover targets and push possibles up accordingly.
With all of the bullishness in the marketplace, it’s difficult to believe that the Dow hit a high for the move almost a month ago on November 25th at 10,931. The Nasdaq Comp hit its high of 2273 on December 2nd. The SP 500 is a bit more recent, December 14th. You would think from all of the Santa Claus rally talk that we were well above all of these numbers. But, You should understand that the three numbers just mentioned are our protection points. As long as we are under those numbers, we are confident the next big move is down. If all three of the indexes go above their respective highs from the last month, then we will reassess. Until then, we remain bearish.
Tomorrow’s items are durable goods orders, expected to be up 0.8% and new home sales. We don’t really expect market moving numbers, but only because most all the traders will not be present on Friday.
Next week is going to be a light week and our post schedule will not be definite. If something happens in the prices that we need to report, we will post. Otherwise, don’t expect an updated post until the New Year.
With that in mind, please have a Merry Christmas and a Happy New Year. The Wednesday Update wishes you and your family the very best.
Dow Industrials: 10,889.44 +55.71
RYVNX: 18.85
TLT: 91.24
BEGBX: 13.27
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