Stock Market Analysis – 12-31-2009
Hopefully everyone had a good Christmas and New Years. After a month long flat base, the market looked ready to continue its uptrend. It’s tough to rely on holiday action though, so I’ll give it a couple days before I open any new trades.
Consistent readers should know that I’m big on historical analysis – that’s the whole point of this blog – so whether you check on a weekly, monthly, or yearly basis, this is probably a good time to check your own holdings too. As for the general market, I love going to the bigcharts performance tables to see what’s hot (although you can get this info almost anywhere). It looks like the top industries from 2009 were Travel & Tourism, Automobiles, Computer Hardware, and obviously commodities.
Automobiles being on top through 2009 may be surprising at first, but if you’ll recall, all of the American auto industry bailout issues were culminating at the end of 2008. Hitting the low point of oversoldness right at the beginning of 2009, coupled with the rebound in consumer spending (and things like cash for clunkers that directed it at automobiles) made for the perfect storm. For the record, I still like Ford, but I would like to see more evidence that they can keep making money before jumping in.
What should we expect for 2010? I don’t make predictions, but I still like commodities as long as we keep printing money like there’s no tomorrow. You also know that stocks in the financial sector will eventually bounce back, but guessing when that will happen is a shot in the dark. Homebuilders are also certain to come back, but I guess that’s why you make watch lists and trade what you see, not what you predict…
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