While last week removed near-term oversold conditions, this occurred largely through time as opposed to price, with the S&P 500 falling -4.5%, primarily on reemerging fears in the financial complex (PBS - Citi Splits & Bank of America Gets a Bailout). That sector (XLF) finished the week down -16.3%! As has often been the case of late, only Treasuries (TLT) and the Dollar (UUP) came out ahead, up +1.4% and +1.1%, respectively.
Week Four of 2009 features relatively light economic reporting, but earnings will pick up significantly, as follows:
While there is undeniably a great deal of popular optimism ahead of tomorrow's presidential inauguration, I remain reluctant to trade in much size on the long side. In addition to the swearing in, traders will also be monitoring developments in banking here and overseas (Bloomberg - RBS Plummets; Europe Trades Down), as well as the proposed Fiat investment in Chyrsler (Bloomberg - Fiat may take 35%). I hope you are enjoying your long weekend!
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