Friday, January 22, 2010

Stock Market -- Position Overview

Our previous newsletter, dated December 21st, stated that earnings have produced the continued "elevated period of consolidation" for the entire stock market. We further stated that the DOW could remain elevated, at least for the near-term, with an projected trading range for the month between 10,200 and 11,000. The actual result saw the DOW continue the gradual ascent, with narrower trading range for the month than anticipated, between 10,235 and 10,580.

We stated that the counter-trend elevated ascent within the stock market could cause the US treasuries to decline in price, inversely driving yields higher, as investors are lured to the stock market. The US 10-year Note was projected to decline in price during the course of the month, and have a base-yield of 3.20% or higher. The US treasuries actual result did see them decline during the period, with the US 10-year Note having a yield-range for the month between 3.22% and 3.92%.

The US dollar was anticipated to resume its primary trend lower, and we projected a euro fx equivalent trading range for the month between $1.42 and $1.52. The actual result did see the US dollar continue its decline in value, with a euro fx equivalent trading range for the month between $1.4235 and $1.5135.