A New Year and Lots of Enthusiasm
A new year and we are starting out with all asset prices pointing higher, stocks, oil, gold, etc. Why not, 2011 was not a fun year for many Wall Street investors and the January effect needs at least to be tried. Stocks want to break out to the upside and they may for a while before they run into a brick wall around 1310 on the S&P. Gold can try to rally to the 200 day average at 1630.
From a longer term perspective however: Over the past five years, first the macros got overbought, then the markets crashed, then the Fed played its hand, and now the austerity mavens are making their play.
Bottom line, for now it looks like more of the broad sideways markets that prevailed in 2011. In the next few days we will review how our forecasts for 2011 worked out and dig into how the particulars look for 2012.
In the meantime, the long stocks / short gold macro position remains for us.