Keeping Perspective

As the market winds down the holiday period it gives all of us time to reflect and look at the future. To us some things stand out:

1) Headlines tell a story. In looking at headlines this month a couple stand out, Wall Street Journals’ “Investors are Losing Faith” and Market Watches’ “Minimize Investment Risk in 2009”, one is stating a fact and one is a year late, but neither have face value for your 2009 planning except in a contrarian sense.

2) Everything hinges on the infrastructure and and green energy build-out, if it is big enough and bold enough, it will work.  All the pessimism we are currently seeing may be correct in the end, but it is way too early, hope will win out over the next six months.  There is plenty of time to get bearish. 

3) In the short-term, (9 to 18 months), the market has a bottom, longer-term (2 to 3 years) there is an 80 percent chance we will see 600 on the S&P.  The real risk in this market is that the 20 percent possibility wins out and we don’t go back to new lows in this cycle through 2017.

4) We see a few ETF’s poking their head out and testing the bullish waters, such as PHO, EWW, XLU, FXI, EWJ, GDX, GLD, RTH, IYZ, UDU.  Interestingly they are ETF’s based on Gold, Silver, Utilities, Retail Holders, Mexico, China, and Japan.  We own some of these and they bear watching as we wait for more impressive upside movement in the markets.

8:47 AM CST