Happy New Year!
Not a happy ending to 2009 as the broad market sold the last hour to end lower by 1%. The focus has now shifted to the new year and what is in store for investors. I find it interesting that much of the chatter is on a correction to start the year. With oil heading back to $81 we could see a pullback. A correction would be a surprise based on the activity leading into January. At this point we have to be patient and stick to what we know.
As I stated all week, planning is the key and you should be ready for the new year. Stops set, watch list built and strategy in place. Having an implementable plan is the key to success. You can adjust and modify your plan as you move through the year, but starting with one is vital.
Technology will be the key sector to start the year along with healthcare. They are both a little extended which could lead to some selling early, but I fully expect they will provide the leadership needed in the first quarter.
Financials remain a question mark. The big banks will struggle and the regionals could show some signs of life. The brokers are the wild card. If they find some momentum look for the broad sector to add some upside however, if they struggle along with the big banks more sideways to downward momentum is likely.
I don’t expect the data to be perfect, but the fourth quarter is likely to provide some upside surprises in GDP and retail sales. The word to describe the first quarter will be sustainability. Can the growth provided by the stimulus sustain itself. If not, look for the broad markets to sell as a result. This will come down to sentiment and the attitude of the investor. Watch closely how this unfolds.
I hope everyone had some time to relax and enjoy family and friends over the holidays. It is always good to get away from the day to day activities and enjoy extra time with others. I look forward to a great year and one filled with many opportunities to achieve my goals and assist in any way I can to help you achieve your goals.
Stay disciplined and have a great day investing.
