Entering The Traditional Positive Period For Small Stocks.
Tuesday, December 18, 9:25 a.m. We were telling subscribers as the market was declining some over the previous three days, that it should be just a brief pullback to test support at 50-day moving averages since our short-term indicators remained on buy signals, and we were coming into the 4th quarter’s quadruple-witching expirations week, which [...]

Tuesday, December 18, 9:25 a.m.

We were telling subscribers as the market was declining some over the previous three days, that it should be just a brief pullback to test support at 50-day moving averages since our short-term indicators remained on buy signals, and we were coming into the 4th quarter’s quadruple-witching expirations week, which tends to be positive.

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The next short-term pattern is the traditional Santa Claus rally that almost always shows up in the week between Christmas and the end of the year.

There is one other pattern that paying subscribers will probably not mind if I pass along at this point to those who are only interested in free information.

We have entered the period when small stocks usually out-perform the rest of the market for a while.

Not all small stocks of course, but there is a strong pattern in identifying which will be the winners and outperform the rest of the market.

Fiscal cliff talks still on predicted course toward successful conclusion.

For weeks I’ve been saying the seemingly hopeless fiscal cliff talks were just following normal negotiations, beginning with both sides ridiculing the other as only talking in generalities, not at all interested in reaching an agreement, not making any actual proposals, then that the first proposals were off the wall ridiculous, and then a minor give on both sides, and then another, while all the time protesting that the other side is not willing to move enough.

But from the reports and more frequent meetings lately it looks like they’re at the final stage of give and take, each side moving the hard line that was supposedly carved in stone closer toward the other side.

I still believe they will meet somewhere in the middle in a compromise that will not be a win or a loss for either side, but will be the best compromise both sides can come up with and will at least kick the cliff down the road.

To read my weekend newspaper column on gold click hereA Warning From Inflation, The Dollar, And Mining Stocks!

Subscribers to Street Smart Report: An in-depth update on the U.S. market, short-term and intermediate-term signals, gold and bonds will be in your secure area of the Street Smart Report website. tomorrow.

Yesterday in the U.S. Market.

A positive day all day with the market closing just about on its high  for the day. Volume picked up a bit to 0.7 billion shares traded on the NYSE.

The Dow closed up 100 points, or 0.8%. The S&P 500 closed up 1.2%. The NYSE Composite closed up 0.9%. The Nasdaq closed up 1.3%. The Nasdaq 100 closed up 1.4%. The Russell 2000 closed up 1.4%. The DJ Transportation Avg. closed up 0.8%. The DJ Utilities Avg closed up 1.4%.

Gold closed up $1 an ounce to $1,696.

Oil closed up $.50 a barrel at $87.20.

The U.S. dollar etf UUP closed unchanged.

The U.S. Treasury bond etf TLT closed down 1.5%.

Yesterday in European Markets.

European markets were mixed yesterday. The Europe Dow closed up 0.6%. Among individual countries, the London FTSE closed down 0.2%. The German DAX closed up 0.1%. France’s CAC closed down 0.1%. Greece closed down 1.5%. Ireland closed down 0.4%. Italy closed up 0.6%. Spain closed up 0.2%. Russia closed up 1.1%.

Asian Markets closed down fractionally Sunday night but up last night.

The Asia Dow closed down 0.2% Sunday night, and up 0.4%.

Among individual markets last night:

Australia closed up 0.5%. China closed up 0.1%. Hong Kong closed down 0.1%. India closed up 0.6%. Indonesia closed down 0.3%. Japan closed up 1.0%. Malaysia closed up 0.5%. New Zealand closed up 0.3%. South Korea closed up 0.5%. Singapore closed down 0.1%. Taiwan closed up 0.2%. Thailand closed up 0.3%.

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Markets This Morning:

European markets are mostly up this morning. The London FTSE is up 0.4%. The German DAX is up 0.4%. France’s CAC is up 0.1%. Spain is up 0.9%. Greece is down 0.7%. Italy is up 0.5%.

Oil is up $.63 a barrel at $87.83.

Gold is up $2 an ounce at $1,698.

This Morning in the U.S. Market:

In addition to being the week that will end with the quarter’s quadruple-witching options and futures expirations on Friday, this week will see a number of potential market-moving economic reports including new housing starts, existing home sales, another GDP revision, etc. The Chicago Fed’s National Economic Activity Index will be out on Friday. That’s the one that was getting very close to the level the Fed considers to indicate the economy is in recession. To see the full list click here, and look at the left side of the page it takes you to.

Yesterday’s report was that the Fed’s Empire State (NY) Mfg Index declined to minus 8.1 in December from minus 5.2 in November. It was the 5th straight month in negative territory, and much worse than the consensus forecast that it would improve to plus 5.2.

This morning’s only report, the Housing Market Index, which measures the confidence of home-builders, will be released at 10 a.m. 

Our Pre-Open Indicators:

Our pre-open indicators are pointing to the Dow being up 50 points or so in the early going this morning.

To read my weekend newspaper column on gold click here: A Warning From Inflation, The Dollar, And Mining Stocks!

Subscribers to Street Smart Report: An in-depth update on the U.S. market, short-term and intermediate-term signals, gold and bonds will be in your secure area of the Street Smart Report website. tomorrow.

I’ll be back with the next regular blog post on Thursday morning at 9:25 a.m.

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And this year our Seasonal Timing Strategy is up 8.3% for the year so far, while taking only 50% of market risk, and in our Market-Timing Strategy we are the #2 Long-Term Market Timer for the year so far in Timer Digest’s December issue.

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