Markets put in a strong performance following the weekend and heading into this holiday shortened week. Breadth was great as volume was decent, sentiment continues to reflect comfort with the situation, as the VIX hovers near 20. If you didn't look at a chart, I bet you wouldn't know where the VIX was in 2007. All the way down to 12! Amazing, there is more downside in store? Quite possible. The talk lately is of course about the dollar and interest rates...and how their current rise is to be explained. I will tell you this, back in 2004 and in 1999 we saw rates and the dollar rise as it meant a steeper yield curve...strong growth and high productivity were the reasons...and while the Fed eventually pricked the bubble businesses were showing robust profits and stock prices were soaring. It didn't matter about valuation. In today's market, that is the case here. We could see some robust earnings this coming quarter, and the market is not reflecting this as of yet. I think the RIMM earnings are a clue of what to expect.
As for the action, it's quite good and a move over 1120 is probably coming soon. I suspect this rangebound market will end with a move to the upside sooner rather than later. Santa Claus Rally starts on Dec 28, so that may stoke some buying.
Speaking of buying, we picked up some new trades today...and expect to book some nice profits soon!
Hit 'em straight!
Bagger
