Daily Investment Interpretations
December 17, 2010
(Friday Night): The
markets ended mixed, and approximately flat. The NASDAQ
Composite was up 5.66
to 2,642.97. The Dow dropped 7.34
while the S&P 500 verniered up 1.04
to close at: 1,243.91. Oil closed up at $88.21 a
barrel on favorable economic news,
and Gold ended down a trifle at $1,376. The VIX declined
Today was a quadruple witching day for stock options, futures, etc.
Mark Hulbert warns that investor sentiment has shifted from climbing a wall of worry to sliding up (until the momentum runs out) a slope of hope... a perfect recipe for a major stock market breakdown: The slope of hope. Sentiment has reached or surpassed its April levels. The team at TopStock Portfolios agrees with Mark Hulbert's assessment (Raising The Bar?), and suggests that upside economic surprises are fueling the current optimism: Auguring a 2011 upturn?. This means that once the economic news improvement curve is no longer concave upward but straightens out and then tops out, the stock market will flatten and then begin to deflate. Exactly when that will occur is anyone's guess, but the markets are evidently quite vulnerable right now. In the meantime, the situation in Europe isn't getting any rosier: Moody's cuts Ireland rating by five notches, EU leaders offer little relief, and Alarm bells ringing.
Tonight's big news is that Congress has passed, and President Obama has signed into law the tax cut bill.