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Here comes the silly season for the markets

December 20th, 2009

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It’s less than one week to Christmas and we would like to wish all our loyal readers a very Merry Christmas and a Happy New Year. Enjoy your holidays and eat, drink and drive in moderation.

For us, we will be taking it easy for the next two weeks. So, you will find that we will be writing at less than our usual frequency from today till the 3rd of January. After the next two weeks of break, we will be back to our regular publication schedule. However, there will be some activities at our Twitter and Facebook page during the holidays. Of course, we wouldn’t leave you completely on the lurch- should there be any extraordinary market events, we will write about them. With that, we will leave you one little market nugget to digest…

It is the official silly season for the financial markets!

What we mean is that at this time of the year, investors should not read too much on the market movements. Traders, like everyone else, are also taking a break and taking it easy. Fund managers are squaring their books. Trading volumes are typically very low. In other words, the markets will be making strange movements that should not be over-interpreted.

Our friend, Adam at Market Club has this to say about the silly season (in the context of the gold market): It’s Official Silly Season for Gold. Adam’s bottom line is this:

I strongly recommend that if you’re not in gold [Ed's note: to trade, not invest] to wait until we see more interest and activity coming into 2010.

If you are into trading, you may want to get 10 trading lessons FREE from Adam Hewison and MarketClub. But if you into long-term big picture invest in gold and silver, then you will want to read out book, How to buy and invest in physical gold and silver bullion.

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This entry was posted on Sunday, December 20th, 2009 at 11:28 pm and is filed under Gold, Investor Education. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

  • rrajkumar
    Yes! We hope Sensex will swing up as you said.
  • Anon
    AUD is falling off a cliff?
    The inverse correlation between USD and other assets seems to be dislocating. Abit like the BDI and equities earlier in the year.
    I've read US retail sales have lifted from news articles, I wouldn't be surprised if the next US GDP figure explodes to the upside.
    Australian retail sales look like they are going to disappoint from the over optimism in news articles. Christmas sales are unlikely to be up to last years...with no stimulus and no drop last year I guess this one is an obvious call. I'm not sure why people were buying Harvey and JB so heavily - their valuations give me Anathema.
    I think the USD has begun a multi year bull and the secular bear has ended altho we may have to retest the lows or have one more blowoff to the downside.

    Heres some stuff I've been reading that some of you might find interesting:

    Consumers in too much debt - over bght idea:
    http://ftalphaville.ft.com/blog/2009/12/01/8618...

    Oaktree - Touchstones
    http://www.oaktreecapital.com/memo.aspx
  • Pete
    That second article is excellent Anon, a great read thankyou.
  • @ Anon

    Thanks. Those 2 articles are very good read. For the first article, it may server to explain why deflation and de-leveraging has not gone out of hand and why inflation is 'working.'

    As for the USD, our feeling is that the downtrend for USD has turned and is trending upwards for say, the next few months. For those who are trading (as oppose to investing in physical gold for hedging purposes) gold, may want to switch from gold to USD if they think this is the case.

    The bull market for USD is one of relativity. If currencies are in a beauty contest, then the winner is the least ugly one. This may be the season where the USD is perceived to be the least ugly.
  • Pete
    Happy Holidays and thanks for everything this year CIJ!

    Maybe next year we can have some more of those educational articles like the ones you did about falacial thinking, market psychology, etc.

    All the best, see you back here in the new year! :)
  • David L
    Happy Holidays. Hopefully there will be nothing to write about for the next two weeks, then what.....maybe you can summarize some of the official predictions for '10 from the various camps out there.
    Thanks for your work.
  • @ David M & David L,

    Thanks guys! Have a good holidays.

    Our guess is that it is likely that the USD will be trending up for say the next few months, which means the AUD will be drifting down.
  • David M
    Merry Xmas and a happy, healthy new year to all of you at CIJ
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