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Holiday Trading Begins today

December 17, 2010

Most of the trading world shuts down for the last few weeks of the year.   The volumes are light, and the action is choppy.

But this day changes from year to year.  Last year, choppy holiday trading started right after Thanksgiving.  Many people were caught flatfooted by the stock market rally, and the Euro situation was just starting to develop.   So people pulled out of the markets early

This year was a totally different story.  Markets have been relatively active up to and including today.  But next week, this will change.  The Stock market had a nice expected rally, and the commodities have put in some nice gains.  Treasuries have been hit by the vigilantes, so they are happy.   But I don’t expect people to put on any more risk, and I expect people to take off risk during the first few days of next week.

The holidays last a long time in Europe and Japan, so they will be out of the markets starting Wednesday.  The week between Christmas and New Years is always slow, and this time it has a full trading week.   So people will be getting out today and Monday, booking gains, balancing the book, winding down minor positions, and getting ready for next year.

I do expect some powerful upward movement during the next few weeks from the bonds, and for gold to get soft.  But the holiday markets are here, and volumes will be light through the next few weeks.


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