Santa rally unbroken six days so far

World Outlook
Fortunately terrorists are even less competent than our homeland security. Homeland security still prefers searching you and I and our grandmothers than terrorists trained in Yemen because that shows they are politically correct and not discriminating against terrorists. This particular a Moslem terrorist had a degree in engineering from a college in London but fortunately was too ignorant to know that plastic explosives only burn (they do not detonate) when lit with a match. 

Market Outlook:

Advice.
Go to:
http://finance.yahoo.com/q/bc?s=000001.SS&t=2y&l=off&z=m&q=l&c=%5EGSPC,%5EIXIC,%5EDJI

See the two year plot of the Shanghai Composite vs. the USA from when this market downturn began. Observe how China led the US markets down and then up as we have been saying all year. Notice China has not set a new high. When we correct for volume on up and down days the NYSE is forming a head and shoulder sell signal that looks like what is happening to China. Our Market Cash Flow index has been calling for going to the security of the sidelines since the beginning of November. Notice that the US markets have done better overall in this down market. But over five years the US market has gone nowhere and China is up about 150%.
http://finance.yahoo.com/q/bc?s=000001.SS&t=5y&l=off&z=m&q=l&c=%5EGSPC,%5EIXIC,%5EDJI


This Week
Seasonal retail sales are up 3.6% and newly unemployed were down slightly. Retail Sales in U.S. Increased 2.3% Christmas Week on Last-Minute Shopping.
Treasury bill auction Demand held strong at the weekly 3- and 6-month auctions, posting solid coverage at 3.39 and 3.57 with the 3-Month Bill Treasury Rate at only 0.110%.

Tuesday, Dec. 29
Consumer Confidence

Wednesday, Dec 30
Chicago PMI
New Home Sales

Thursday, Dec. 31
Unemployment Claims

Friday, Jan.1:
Markets closed for New Year's Day


Market forces December 29

We estimate the NYSE must still rise 2.7% from yesterday's close to be interpreted as a continuing rally not a declining head and shoulder sell signal. That reflects both the price change and volume of shares being traded. However the Spiral (Parabolic SAR) indicator and the MACD are now more optimistic.

Asian markets were up slightly over night; China up 0.7%, Hong Kong up 0.1%, India up 0.2% , and Japan up 0.1%.

European markets are up with the average in a range from 0.2% to 0.5% this morning about half way through their day.

US pre-market futures up by about 0.3% today at 8:30 AM EST.

We are preparing for a possible market decline in early 2010 that could take prices down to the high where they were at the end of May seven months ago.