Special Risk Capital Management LLC

Happy (cautious) New Year January 9, 2011

The new year has begun and with it indecision about what is ahead for the world markets. Why ? Well a number of things are of concern and bear close watch.
First, 2010 was a good year, which followed 2009, which was a terrific year (after April). Markets typically take a “breather” and a significant correction would not be unusual.
Second, many market breath indicators (the ones that show what is happening beyond price) are rather Bearish right now.
Does this mean the market has to go down? Of course not. But it does mean that all is not clear sailing. The 4th quarter earnings coming up may be the catalyst for either a correction or a continuation. Remember, earnings growth (or their perceptions) are what ultimately drive a stock price.
For now, be invested but “dance close to the door”.

I hope these comments help, I’m always looking for feedback. Cheers.