January shaping up to be a good month for investors too.

Selling in Asia precipitated by the smaller than anticipated moves to stimulate the economy of China. But given the higher volatility of Asian markets the three-month trends are normal and are on a path to recovery. European markets are up modestly as are the USA market futures.

We can expect the European contraction to be more severe than most of Asia because they are trying to keep their currency stronger as Japan has done. This is because Germany now dominates the European economics, and Germany and Japan share a propensity for austerity even to the degree that it causes them economic pain. If all economies acted in unison there would be smaller imbalances and fewer currencies attacks from traders but it also results in greater economic volatility because everyone has peak demand at the same time and then commodity price collapses at the same time. Longer periods of expansion tend to exacerbate the alignment of economies. But if the USA and China were 180 degrees out phase commodities would not have such great swings because demand would be more uniform. That would help the developing world grow. But with the financial credit system currently in locked step, going against the trend as Germany and Japan tend to do is better for the world economy but very difficult and costly.

December 22 had very low market volume on the price decline. That is actually a good trend. We want advances driven by high volume and declines on low volume because that indicates money, overall, are flowing into the market. The USA market three-month trend is ascending but the parabolic SAR trend lines have been hit so there is now an increased probability of consolidation and possibly a small decline. The MACD for each market is still positive but is declining.

Last year at this time we pointed out that we could see retail sales were way down in New England because parking lots were partially empty at mid day. We were advising that the economy was headed to a recession. But the Wall Street analysts were telling the public the opposite. They wanted the public to buy when the market was beginning to collapse. We said the January retail sales reports would show that Wall Street was not telling the public the truth.
This year we see in New England that sales are better than last year but Wall Street has shorted the market and you are now hearing them falsely declaring that retail sales are down the season.

So take heart, because we can expect January reports will be better news and will help the advance into the next year. Already the Thanksgiving sales were reported up a modest 3% while Wall Street short sellers had declared it a disaster. Wall Street short sellers do not want investors to profit they want to profit themselves and for more than a year the profitable hedge funds have been shorting the markets so they profit by driving down stock prices. This trend in the USA has been reversing since October but they still want to panic the markets so they can cover their shorts profitably. Eventually the short sellers will panic and that is when the market will advance rapidly. We see January as likely a very good month for investors. And while we are still consolidating, December has recovered about 10% for investors. But we believe there can be another 20% to 30% recovery from these 10% higher current levels before another consolidation period. That conclusion is based on an evolving recession not the financial panic short sellers and politicians had been proclaiming since June-July of 2008 when Senator Schumer of New York caused the first run on and American bank located in LA. Such election year rhetoric was out of control and caused panic and crisis.