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Thursday, December 22, 2011

Santa Claus rally ongoing

As expected & discussed yesterday, today is an up and good day for the overall market. While the trading volume is very small understandably, the general market sentiment is quite upbeat. The last two weeks are generally good ones for the stock market. At this time period, fundamentals usually don't count and cannot be relied on. The fund managers who are still working usually want to see a higher stock market so that their results can look nice at the year end. With the very light trading volume, the market can easily be "manipulated" to trend high. Unless there is really terrible news coming in the remaining days, there is a good chance that the overall market will continue with the upward trend.  Pay attention to the resistance level of 1260 for S&P500. If this level is pierced through, technically there is nothing in the way for S&P500 to jump to 1300. Again this will be much easier to be done with light volumes.

By the way, these days a climbing stock market is usually accompanied by a declining US$.

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