Posted by jdavis on November 28, 2011
Just a very quick note to say it does feel as if a Santa Claus rally is upon us. Rallies into Xmas are by far the norm but never certain.
There was a lot of bearishness around these last 2 weeks. Yet, at the end of the week (Thanksgiving Week in the US) the markets seemed to stop falling and some important stocks, such as Goldman Sachs, rose.
Also, the € appears to have stopped falling vis-à-vis the US$. (There has been a strong correlation between the strength of the € and the strength of the stock market.)
Thus, I shall be watching carefully today. If a rally is forming we’ll know more today. It could well be 10-20% into January 2012.
Thus, I may well be recommending a reduction in the short fund at these lower levels. I’ll contact clients individually, as usual.
Again, all of this is ultra short term and our clients have relatively little which is short the market.
The big picture is hugely bearish both economically (the real world) and for markets (the made-up world)