Thursday, December 31, 2009

Short Swing Position now + 15.75 pts in profits

Happy New Year !
What a great trade to end the year with. Short from 1126, see previous post.
Market did as expected and technical analysis scenario became reality.
The year's final session was again characterized by very light trading volume and only a trickle of news flow. While the day ended on a bearish note, equities capped a strong year (as outlined in the Market Performance section above) - the best since 2003 - and still ended the session near yearly highs. Emphasis was once again placed on the movement of the US dollar. The Dollar Index closed the session with a 0.1% gain (it ends the year with a loss of 4.1% but saw a strong recovery in December).
Looking back over the year, financials had a stellar performance when counting from the rally off the March lows. While the financial sector was up 'only' 14.8% for the year, it exploded roughly 250% off the March low where numerous widely-held bank stocks had traded as low as one dollar (and below).
When looking at the recovery rallies off the March lows (a 12-year market low), the major indexes themselves also produced stellar results this year: The Dow surged more than 3,800 points (59.3%) from its March 9 closing level; the S&P 500 exploded nearly 65% higher; the Nasdaq bolted 78.9%.
Today's economic data included the latest initial jobless claims (i.e., new claims for unemployment benefits) for the week ending December 26. While economists had been expecting to see 460,000 initial claims, the actual number came in at 432,000 (with claims falling by 22,000 from the prior week). While there were seasonal impacts (i.e., the Christmas holidays), the number was the lowest in over 15 months. A positive development was also seen for the number of continuing claims: Here, the number dipped below 5 million for the first time since February 2009 (with the number of continuing claims coming in at 4.98 million).

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