sp'monthly
Dow'monthly'2, rainbow
Summary
First, note the upper bollinger band on the monthly charts. Market is now offering the sp'1880s, along with Dow 16800s by mid/late January. By late spring, bulls will have an opportunity for Dow 17500/750, with sp'1950/2050.
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BDI gaps lower to start the year
BDI, monthly
A 7% drop in the BDI to start the year, but there seems high likelihood that the BDI will battle into the 3000/3500 zone this spring, perhaps even the 4000s, before collapsing in half by late summer. This chart, as I will keep highlighting, has huge implications for the shipping stocks, most notably, DRYS.
The Mighty DAX
*a poster was asking about my outlook on the DAX.....and yes, I do take requests! I will also be covering the usual ten world indexes this weekend.
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DAX, monthly
Germany remains the powerhouse of the EU, and without question, its fiscal position is better than the USA. The only problem is that unlike the US - which has the Fed to print endless money to fund any deficits, Germany is unable to directly finance itself via the print key, since it is part of the Euro currency.
Despite starting the year with a somewhat significant fall of -1.6%, the monthly charts are very much offering the big 10k level by the late spring, before an anticipated 10/20% fall this coming summer/autumn.
Equity bulls have downside buffer all the way down to the 8000/7500 (a huge 15/20%) by late summer, before the broader up trend is broken. Indeed, the 8000 level would be an effective back test of the old double top high of 2000/2007 - that would equate to sp'1625/1575 zone.
Looking ahead
There isn't much due tomorrow. Just vehicle sales, and the Oil and Gas reports. However, there are no less than four Fed officials speaking, including the Bernanke. Don't be surprised if a few comments are used as an excuse by the algo-bots to kick the market around a bit.
*no sig' QE until next Tuesday
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A long..and tough year ahead
Tomorrow will again likely be somewhat muted, as many traders are still on holiday. Things really won't get going until next Wednesday when we have the FOMC minutes, and followed by the monthly jobs data on Friday.
The year ahead though is surely going to be another difficult one (when isn't it?). My best guess is that the market is desperate for a major shakeout move, and that we'll see a major wave lower once we are past the spring. I'm still resigned that the next major equity collapse wave of 40-60%, is still a good 2-3 years away. I realise many sure won't like hearing that, but that is how I currently see things.
Goodnight from London