Not sure whether Friday's action was significant or not. The strength in a few internet stocks and retailers stood out to me. I will be watching those sectors to see if they can become the leaders on the upside.
I also thought the leap higher in South Korean iShares (EWY) was interesting. That country took up a lot of slack in the 4th quarter buying something like $25 bln in US Treasuries while cutting rates in their own country all to weaken the Won. The net effect is a big shot in the arm to their economy. The effects of that stimulus probably wouldn't be felt yet but something seems to be going on. I have mentioned Japan on a few occasions and it seems to me that the two countries getting jiggy together should have nice synergism. They may need to carry each other if '05 is to be the year China slows down.
The weak spot in the market was still General Motors (GM) though it did hold the Oct lows and appears to have put in a reversal on the S&P ratings and outlook affirmation. I would keep watching that stock and Fannie Mae (FNM) to see if they weigh on the finance sector. Verizon (VZ) has been getting clocked lately but it is at kind of an interesting point having filled a gap right as it retests the broken downtrend line.
I did end up exiting my GBP / Yen trade on Friday and am getting pretty convinced '05 will be a good year for the Yen. On Friday, I read Mark Faber's musing that '05 ($$) may be the year the dollar is goes up as opposed to stocks, bonds, commodities, and any other currencies. I don't see it but above 105 dollar / Yen I would give it a lot more consideration.
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