Jerry Samet
12-31-2011, 01:11 PM
The market closed down slightly on Friday as the major averages declined a little less than half a percent on the day. Volume was light as you would expect, but it was higher on the NYSE, producing a distribution day for the S&P 500. Volume was slightly lower on the Nasd so it avoided a distribution day on the market exposure model. The major averages were mostly flat on the year(except the Dow being up 6%), masking a bear market in the overall market. It was similar to 1994, when the averages were flat but covered up a stealth bear in the underlying market. Leading stocks performed about in line with the market, declining .36% on lower and extremely light volume. Next year is likely to be mixed. The monthly Coppock is declining and will likely be in a position to issue a buy signal by spring or summer. If this plays out as it has in the past we will see a continuation of the bear market in the early part of 2012, followed by a buy signal around the summer that will tell us that a new cyclical bull market is starting. The first year after that signal is the best time in the entire cycle to generate large trading gains. Thus I think we will have a split market next year, weak in the beginning and strong later in the year. I hope everyone has a good new year and a very profitable 2012. Jerry