January historically ends the "best three month span" of the stock market. Judging from these past three months it's scary to think these were the best three months.
Trader JPW sent the following, which helps with our perspective:
"I know you like these kinds of headlines for your alerts, thought you might find it amusing:
*Headlines On This Date 4 Years Ago:*
* "Republicans spending $42 million on inauguration while troops*
* Die in unarmored Humvees"*
* "Bush extravagance exceeds any reason during tough economic times"*
* "Fat cats get their $42 million inauguration party,*
* Ordinary Americans get the shaft"*
-----------------
* Headlines This Week:*
* "Historic Obama Inauguration will cost only $120 million"*
* "Obama Spends $120 million on inauguration; America Needs A Big Party"*
* "Everyman Obama shows America how to celebrate"*
* "Citibank executives contribute $8 million to Obama Inauguration"*
We suggested a mid day buy Friday on the February 400C, and many traders were able to buy in at 10.50 area, selling to 12.50, within an hour, or continue to hold. What's next for the market is easy to help us understand:
NO one knows. Some economists and chartists see a continued downside to the S & P at 500, meaning another 35 to 47% overall drop to the Dow from our November lows. These dooms-dayers have valuable data and opinion that can validate their opinions. Others, in turn, see a continued whipsaw around November lows at 7700 (which we test again and again) to the rally effect rebounds near 9050 that we experienced earlier this year.
Both are right. The optimists, of which I have been one, see a Fib retracement of 38.1% from the market lows, perhaps by the end of this year, putting the market at 10,600. Market conditions, however, are so volatile, with banking sector news by the hour, that any trend analysis beyond 14 days we consider almost irrelevant.
Trader MLD Friday wrote: "Great trade on the call, Floyd. Got 2.00 per contract within an hour of the buy, and I"m out. I'm 13 for 14 on the last trades, great profits."
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