The Dubai event on the 11/28 altered my forecasts in a still unknown way. As stated in Previous posts, I expected a 3-3.3% drop sometime; the Dubai event knocked the market from its close on the 27th of 10513 to an intraday low on the 28th of 10179 -- a 3.2% drop. That, with end-of-month, may have cleared the air for a rise now through year-end. I'm not too confident, even though another intraday low did come on December 4th within my December 4-7 bottom range, but my guess would be higher upside through December than downside. Thus, I closed my shorts (QID and DXD)at Friday's bottom and sitting on the sideline to see what Monday brings. A few more days of bumpiness is expected.
January will be a month to fear earning reports, especially if retail is dismal as expected and if more than the part-timers working through the holiday are laid off. Bad earnings, more job losses, and slowdown to manufacturing will spell a troubled quarter or first half. Particularly damaging will be the passing of the $1T+ health care bill, the Cap & Tax (oh, Trade) bill, and the printing of more money to disguise the damage. So, beware, dragons ahead. But, do go ahead and enjoy the Christmas season and make every last buck you can before the bubble bursts.
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