What can we expect next week?

This is going to be a tough week to call. We don't expect too much volume in any direction. We only have a few economic data points to watch out for here in the states. We are at the end of earnings season (AGAIN?) as AA Alcoa reports on January 9, 2012. Yeah it earnings season again.

We, unfortunately have to look to Europe, Russia, and China to get a feel for what might happen this week. We think the Euro Dollar relationship is going to be weaker, and we are getting the jitters about political stability in Russia and Iraq. The social unrest in parts of the middle east is pimping the oil speculation. That along with the consistently better news out of the US economy is pressing oil above the 100.00 a barrel price. Look at your energy exposure as we think it will be a good year for the oil and nat gas market. We like XOM and CVX, but do your homework.

Tuesday

We have the Case Shiller housing price index and the expectation is a drop of 3.5%. We can't find anything to make us disagree. But that assumption is probably built into the market.

Consumer confidence numbers are released and we should see a number above 60. 59 is the consensus so 60 is not going to be a market mover.

Though it is not a closely watched number, tomorrow we will have the State Street Confidence report. This is a raw data report not opinions. It measures the amount of assets institutional investors (Hedge Fund Managers and MF managers) are putting in stocks versus bonds, Treasuries, or cash. The more equities the more market confidence they have. We have seen numbers in the high 90s and 100 is a indication that portfolios are 50% in equities. Look for 100-102 in the number. Now why is that important? Look at the Salvay Lewcrum Explains:Market Direction. These money managers are the ones who move the market.

Wednesday

We have an oil inventory report and a mortgage application number released. No news makers there. Unfortunately that leaves us to the whims of the Euro Dramas.    

Thursday

We have the jobless claims number which will continue to improve, but at a very slow pace. That is built into the market.

We also have the pending home salse index number which exploded last month. Look for a drop back to a normal range of 1-2%. A surprise either way could be a market mover.

The Chicago PMI reports and the consensus indicates a small contraction. We think we will see a small expansion or at least level with last months positive report.

Friday

De Nada

So with those few data points, relative stability in the market, and assuming no huge surprises out of Europe, we thing last weeks 3.6% improvement in the market will carry over and we will see a 2% gain next week to finish this amazing year.

What will next year bring?

Remember, we have an offer out there for anyone who wants to take a guess on the 2012 final S&P 500 number and the Dow Jones Industrial will have a chance of winning about $200.00 in premium subscriptions to either Morningstar or eIBD. Have your guesses to me by January 6, 2012.

What are we doing this week?

We will continue to unwind from our various option chains. We are confident we will see a 40-50% gain on our VRUS option. When we clear it I will show you how we did and how you can do it as well.

Over the first part of this break, I am gleaning 221 e-mails for stock to go on the watch list. There are a lot of nice looking stocks forming clear bases and probably buy points. Here are a few candidates you might want to research yourself.

APEI American Public Education, Inc. provides online higher education focused primarily on serving the military and public service communities. This stock is on a tear and the one blemish hanging over it is the military cutbacks recently proposed. We are watching this and waiting for a base to form after establishing a nice buy point at $48.07.

CLR Continental Resources, Inc. engages in the exploration and production of crude oil and natural gas primarily in the north, south, and east regions of the United States. This looks good except for their recent earnings. That is why its on a watch list and not in the portfolio. There is a beautiful cup and handle on this stock with a buy point of $68.40. We are still going to be patient.

V Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. You Owe It Well. Sorry could not resist. It always makes my behind pucker when everybody loves a stock. Ned Davis, Argus, Credit Suisse, IBD, Value Line and the list goes on and on. This is a nice looking stock, the only thing missing is a definable entry point. Megan, if your out there, I know your good at spotting them. Tell me if you see one? Since June it looks like a block or a shallow saucer pattern. It was in a 10 dollar trading range until Dec 16 which would define an entry point at $97.85. Since I am starving for a finance stock this might be our play. We will decide tomorrow.

That enough for now as I have about 138 more stocks to go. Don't believe me, here is page 1 of three notes I have to scrub through.

Salve Lucrum