Grandich's Blog

Please Note: Our offices will be closed from December 24^th to January 5^th but I will continue to post on the blog from time to time.

U.S. Stock Market – Did this guy steal the “Santa Claus” rally or was it all compacted into last Tuesday’s hoorah on the Fed’s announcement?

Far be it for me to ruin the holiday spirit but I can’t help but to point out that the market fell three straight days after the “Hail Mary” pass by the Fed last Tuesday. Before we break out the eggnog and hang the mistletoe, it’s also worth noting that the market failed again to get above 9,000 and is now close to the last low of 8480 made after the previous test of 9000. A close below 8480 could suggest we’re going to need to re-test the lows around 7500. If this is to occur, I think it would be in January as the market environment is going to be very thin until January 5^th.

I find it disturbing the Treasury has used up the first TARP allocation already and is back asking for the second part. We still have no real idea who has received it. If we do start to head back to the lows, the Fed’s announcement this past Tuesday should look more and more like another failed strategy to right the sinking ship. Stay tuned.

Gold – Has consolidated its sharp recent gains as expected and it too will go into thin market conditions until the New Year. Here are a couple of videos about gold and mining shares.

Oil – Read this from yesterday.

U.S. Dollar – It too corrected its sell-off as anticipated. Yes, thin markets to New Year’s as well

Some of us have speculated that a key reason why banks are not lending is they know another big shoe is only now just starting to fall hard – commercial real estate. Listen to this video

Keep an eye on the 10-yr. Treasury Note. I think if it can break below a 2% yield, an opportunity to short it could prove to be a winner a year or so from now. There’s ETFs to use so stay tuned.

I will be on “Market Call Tonight” on Dec 30^th www.bnn.ca