Volatile Week Ahead

The stock market has spent most of the year trying to go up with the Dow crossing over that magic 11K figure for three days last week.  Friday’s close was just under that figure as the Dow had dropped below 11K on Thursday.  

We anticipate a volatile week this week as the bulls and the bears try to figure out if the market is “for real” or not.  The week contains the first options expiration of the year and that in itself should provide enough fireworks.  Tuesday we get to hear from INTC which should provide the market with something to chew on.  There is a lot of hype surrounding INTC’s announcement so there will be a lot of attention directed to it.

The front page of the WSJ on Tuesday will provide another trigger, that being the fourth quarter slowdown.  The article points out that economists estimate that overall growth fell below 3% in the fourth quarter.  Don’t worry though, consensus for growth in 2006 is still higher than that at 3.4%.  

We are looking forward to another week of trading.  All of the buying that took place over the past two weeks has eaten away at some of the cash sitting out there and we look for a modest pullback for now.  

Even thought it’s Tuesday, the market thinks it’s Monday so we expect at least an up opening.  We’re not expecting much and we expect it to be sold.  As the week progresses we will look for more clues as to the future direction of the market.  

We think the correct position is Cash and Cash is King.  Be careful and be selling.

Dow Industrials: 10,959.87  -2.49
RYVNX:   17.23
RYAIX:    21.06
TLT:   92.03  (What a difference two days can make!)
BEGBX:  13.42

Just as a reminder, these four investments had dividends at the end of the year or as is the case with TLT monthly dividends that have not been taken into account.  These dividends  make these numbers better than what they show by adding a little extra income.