There are record low levels of cash being held by mutual fund managers now.

There are record low levels of cash being held by mutual fund managers now. The AAII poll of individual investors is record optimistic, and the low VIX (fear) Index is at record levels of complacent optimism.

World Markets:
The routes through Turkey and Greece seem to be the last major entry point loopholes for illegal immigrants who go to Europe because European socialist welfare payments are greater than the welfare 95% of the population on Saudi Arabia, Iran, Iraq, and Pakistan get from their Moslem welfare states. The Moslems take advantage of European welfare payments to clear $1000 per child per month in payments plus medical coverage. That is thought to be a western gift to help them conquer the world via high birth rates.

Economic reports:
Today
Jan 3 10:00 AM Construction Spending Nov
Jan 3 10:00 AM ISM Index Dec

Jan 4 10:00 AM Factory Orders Nov
Jan 4 2:00 PM FOMC Minutes
Jan 4 3:00 PM Auto Sales Jan
Jan 4 3:00 PM Truck Sales Jan
Jan 4 3:00 PM Truck Sales Jan
Jan 5 7:00 AM MBA Mortgage Purchase Index 12/31 -
Jan 5 7:30 AM Challenger Job Cuts Dec
Jan 5 8:15 AM ADP Employment Change Dec -
Jan 5 10:00 AM ISM Services Dec
Jan 5 10:30 AM Crude Inventories 01/01
Jan 6 8:30 AM Initial Claims 01/01
Jan 6 8:30 AM Continuing Claims 12/25
Jan 7 8:30 AM Nonfarm Payrolls Dec
Jan 7 8:30 AM Nonfarm Private Payrolls Dec
Jan 7 8:30 AM Unemployment Rate Dec
Jan 7 8:30 AM Hourly Earnings Dec
Jan 7 8:30 AM Average Workweek Dec
Jan 7 3:00 PM Consumer Credit Nov

Market Outlook Jan 3, 2011

We still need to see if people return to the market this year. There was some evidence it was happening three months ago but that faded in December. The first week of the year is when the wishful thinkers buy stocks because they think that predicts the month of January and that January predicts the year. As goes January so goes the year is their saying yet studies reported over the years show no correlation.

If there is a sell off it should come within the first weeks of January. Obama has done nothing for two years to liquidate the crippled mortgage market. This has frozen worker mobility and is destroying credit ratings so that housing will take five years just to recover to where it was before Barack Obama.

By mid year we expect state and federal worker layoffs because the socialists have not put their government houses in order. Many predict a major sell off at mid year when the individual states are in crisis. But typically the stock market is six month ahead of economy. QE2 ends mid year but we expect that to be extended.

World Markets
Asian markets were mixed last night. China's market was closed, Hong Kong up 1.7%, India up 0.3%, and Japan closed.

European markets are up this morning in a range of about 0.4% to 1.7% half way through their day.

US pre-market futures are up about 0.5 % at 7:00 AM EST.