Jingle Bells

"Jingle Bells" is not specifically a Christmas song.

The first verse and chorus are the most often sung (and remembered) section of "Jingle Bells":

Dashing through the snow, In a one-horse open sleigh

O'er the fields we go, Laughing all the way

Bells on bobtail ring, Making spirits bright

What fun it is to ride and sing, A sleighing song tonight

(chorus)

Jingle bells, jingle bells, Jingle all the way;

Oh! what fun [joy] it is to ride, In a one-horse open sleigh.

Jingle bells, jingle bells, Jingle all the way;

Oh! what fun [joy] it is to ride, In a one-horse open sleigh.:

Although less well known than the opening, the remaining verses depict high-speed youthful fun. In the second verse the narrator takes a ride with a girl and loses control of the sleigh:

A day or two ago, I thought I'd take a ride

And soon, Miss Fanny Bright, Was seated by my side,

The horse was lean and lank, Misfortune seemed his lot

He got into a drifted bank, and then we [And we—we] got upsot.b[›]

In the next verse (which is often skipped), he falls out of the sleigh and a rival laughs at him: Note the incorrect form of the verb "lie." The event is being told using the past tense and should be "lay." List of commonly misused English words

A day or two ago, The story I must tell

I went out on the snow, And on my back I fell;

A gent was riding by, In a one-horse open sleigh,

He laughed as there I sprawling lie, But quickly drove away.

In the last verse, after relating his experience, he gives equestrian advice to a friend, who then picks up some girls, finds a faster horse, and takes off at full speed:

Now the ground is white, Go it while you're young,

Take the girls tonight, and sing this sleighing song;

Just get a bobtailed bay, Two fortyc[›] as [for] his speed

[and] Hitch him to an open sleigh, And crack! you'll take the lead.

"Jingle Bells" was first recorded by the Edison Male Quartette in 1898 on an Edison cylinder. In 1902, the Hayden Quartet recorded the song.

In 1943, Bing Crosby and the Andrews Sisters recorded "Jingle Bells" as Decca 23281 which reached No. 19 on the charts and sold over a million copies. In 1941, Glenn Miller and His Orchestra with Tex Beneke, Marion Hutton, Ernie Caceres and the Modernaires on vocals had a No. 5 hit with "Jingle Bells" on RCA Victor, as Bluebird 11353. "Jingle Bells" has been performed and recorded by Perry Como, Frank Sinatra, Louis Armstrong, Duke Ellington, Dave Brubeck, Count Basie, Ray Brown, Oscar Peterson, Ella Fitzgerald, Nat King Cole, Mike Horsfall, The Hoppers, Boney M and Ann Hampton Callaway. In 2006, Kimberley Locke had a No. 1 hit on the Billboard Adult Contemporary chart with a recording of "Jingle Bells".

"Jingle Bells" was the first song broadcast from space, in a Christmas-themed prank by Gemini 6 astronauts Tom Stafford and Wally Schirra, December 16, 1965. They sent Mission Control this report: "We have an object, looks like a satellite going from north to south, probably in polar orbit ... I see a command module and eight smaller modules in front. The pilot of the command module is wearing a red suit ..." The astronauts then produced a smuggled harmonica and sleighbells and broadcast a rendition of "Jingle Bells"

Like many simple, catchy, and popular melodies, "Jingle Bells" is often the subject of parody. Some of the most notable include:

"Grandma Got Run Over by a Reindeer" (Elmo & Patsy), uses a variation of the "Jingle Bells" chorus as an opening; in addition, the chorus of "Grandma" uses slightly different chord patterns.

Bart Simpson sings a version on The Simpsons, the first time being on "Simpsons Roasting on an Open Fire".

"The Christmas Song" (Nat King Cole), "Santa Claus Is Coming to Town" (Bruce Springsteen), "Grandma Got Run Over by a Reindeer" (Elmo & Patsy), "Christmas at Ground Zero" ("Weird Al" Yankovic), "Have Yourself A Merry Little Christmas" (John Denver and the Muppets), "River" (Joni Mitchell) — these songs all close with variations of the "Jingle Bells" chorus.

Toward the end of A Christmas Story a group of waiters in a Chinese restaurant sing the chorus of this song to the Parker Family, of course mispronouncing some words as "Jinger Bears" and "shreigh", in a confusion of Asian stereotypes, as it is actually the Japanese who tend to convert L's to R's, whereas the L is a common vocal sound in Chinese.

Finally, Barbra Streisand's Jingle Bells?, on her 1967 album A Christmas Album, is a faster, sillier version of the original, arranged by Marty Paich. Streisand uses "Upsought" effectively (and comedically) as a question. Here is a very young Streisand singing that version. Jingle Bells.

Source Wikipedia: http://en.wikipedia.org/wiki/Jingle_bells

White Christmas

Perhaps no song is as associated with the season of than "White Christmas. "White Christmas" is an Irving Berlin song reminiscing about an old-fashioned Christmas setting. The version sung by Bing Crosby is the best selling single of all time.

Accounts vary as to when and where Berlin wrote the song. One story is that he wrote it in 1940, poolside at the Biltmore hotel in Phoenix, Arizona. He often stayed up all night writing — he told his secretary, "Grab your pen and take down this song. I just wrote the best song I've ever written — heck, I just wrote the best song that anybody's ever written!" 

The first public performance of the song was by Bing Crosby, on his NBC radio show The Kraft Music Hall on Christmas Day, 1941. That recording is not believed to have survived. He later recorded the song with the John Scott Trotter Orchestra and the Ken Darby Singers for Decca Records in just 18 minutes on May 29, 1942, and it was released on July 30 as part of an album of six 78-rpm songs from the film Holiday Inn. At first, Crosby did not see anything special about the song. He just said "I don't think we have any problems with that one, Irving." 

The song initially performed poorly and was overshadowed by the film's first hit song: "Be Careful, It's my Heart". By the end of October 1942, however, "White Christmas" topped the "Your Hit Parade" chart. It remained in that position until well into the new year. (It has often been noted that the mix of melancholy — "just like the ones I used to know" — with comforting images of home — "where the treetops glisten" — resonated especially strongly with listeners during World War II. The Armed Forces Network was flooded with requests for the song.) 

In 1942 alone, Crosby's recording spent eleven weeks on top of the Billboard charts. Following its prominence in in the musical Holiday Inn, the composition won the Academy Award for Best Original Song. In the film, Bing Crosby sings "White Christmas" as a duet with actress Marjorie Reynolds, though her voice was dubbed by Martha Mears. This now-familiar scene was not the moviemakers' initial plan; in the script as originally conceived, Reynolds, not Crosby, was to sing the song.

The familiar version of "White Christmas" most often heard today is not the one Crosby recorded in 1942. He was called to Decca studios on March 18, 1947, to re-record the track; the 1942 master had become damaged due to its frequent use. Efforts were made to exactly reproduce the original recording session, and Crosby was again backed by the Trotter Orchestra and the Darby Singers. Even so, there are subtle differences in the orchestration, most notably the addition of a celesta and flutes to brighten up the introduction. 

Crosby was dismissive of his role in the song's success, saying later that "a jackdaw with a cleft palate could have sung it successfully." But Crosby was associated with it for the rest of his career. Another Crosby vehicle — the 1954 musical White Christmas — was the highest-grossing film of 1954. 

Crosby's "White Christmas" single has been credited with selling 50 million copies, the most by any release. The Guinness Book of World Records lists the song as a 100-million seller, encompassing all versions of the song, including albums.[1] Crosby's holiday collection Merry Christmas was first released as an LP in 1949, and has never been out-of-print since. {Source Wikipedia: http://en.wikipedia.org/wiki/White_Christmas_(song)} 

As mentioned "White Christmas" has been featured in two Crosby films "Holiday Inn" and "White Christmas". The latter is a 1954 Technicolor musical motion picture starring Bing Crosby and Danny Kaye. The film was directed by Michael Curtiz and co-stars Rosemary Clooney and Vera-Ellen. Here is Bing Crosby singing the song during the finale of the movie. White Christmas

Merry Christmas!

It is our fervent hope that each and every one of you who reads this has a wonderful holiday season.  Whether you are about to celebrate Christmas or have already celebrated Hanukkah, it is our hope that peace and joy are with you during this season.  We also hope that 2010 is a year of prosperity for each and every one of you.  Finally from all of us we wish you a Merry Christmas and a Happy New Year!

Peace and God Bless!

Stille Nacht

"Silent Night" (German: Stille Nacht, heilige Nacht) is a popular Christmas carol. The original lyrics of the song Stille Nacht were written in German by the Austrian priest Father Josef Mohr and the melody was composed by the Austrian headmaster Franz Xaver Gruber. rThe carol was first performed in the Nikolaus-Kirche (Church of St. Nicholas) in Oberndorf, Austria on December 24, 1818. Mohr had composed the words two years earlier, in 1816, but on Christmas Eve brought them to Gruber and asked him to compose a melody and guitar accompaniment for the church service.

In his written account regarding the composition of the carol, Gruber gives no mention of the specific inspiration for creating the song. According to the song's history provided by Austria's Silent Night Society, one supposition is that the church organ was no longer working so that Mohr and Gruber therefore created a song for accompaniment by guitar. Silent Night historian, Renate Ebeling-Winkler Berenguer says that the first mention of a broken organ was in a book published in the U.S.

The original manuscript has been lost. However a manuscript was discovered in 1995 in Mohr's handwriting and dated by researchers at ca. 1820. It shows that Mohr wrote the words in 1816 when he was assigned to a pilgrim church in Mariapfarr, Austria, and shows that the music was composed by Gruber in 1818. This is the earliest manuscript that exists and the only one in Mohr's handwriting. Gruber's composition was influenced by the musical tradition of his rural domicile. The melody of "Silent Night" bears resemblance to aspects of Austrian folk music and yodelling.

The carol has been translated into over 44 languages.[3] It is sometimes sung without musical accompaniment. The song was sung simultaneously in English and German by troops during the Christmas truce[4] of 1914, as it was one of the few carols that soldiers on both sides of the front line knew.

The song has been recorded by over 300 artists. Here below is the musical ensemble "Celtic Woman" and their version in both Gaelic & English.

Silent Night

I'll Be Home For Christmas

In November 1943, American GIs were battling up the Italian Peninsula, fighting in the Marshall Islands and would soon fight the Battle of Tarawa. 11 million men were in the military. Thus when Bing Crosby released "I'll Be Home For Christmas" it quickly flung itself up the national charts.

In 1943, this song joined "White Christmas" to become one of America's most popular holiday songs. The recording by Bing Crosby shot to the top ten of the record charts that year and became a holiday musical tradition in the United States. The idea of being home for Christmas originated in World War I when soldiers at first thought that the war would be quick and they would return by Christmastime.

"I'll Be Home for Christmas" was written by Buck Ram, Kim Gannon and Walter Kent. A song titled "I'll Be Home for Christmas" was first copyrighted on August 24, 1943, by Kent (music) and James "Kim" Gannon (lyrics). The two revised and re-copyrighted their song on September 27, 1943, and it was this version that was made famous by Crosby. According to Ram, who was primarily a lyricist, he had written the lyrics as a 16 years old, homesick college student. Prior to his publishers planned release, he had discussed the song with two acquaintances in a bar. He left a copy with them, but never spoke to them about it again. Both he and his publisher were shocked when the song was released by a competing publishing house. Per news articles of the day, Ram's publisher, who had been holding the song back a year because they were coming out with "White Christmas," sued Gannon and Kent's publisher and prevailed in court.

On October 4, 1943, Crosby recorded "I'll Be Home for Christmas" with the John Scott Trotter Orchestra for Decca Records. Within about a month of Kent and Gannon's copyright the song hit the music charts and remained there for eleven weeks, peaking at number three. The following year, the song reached number nineteen on the charts. It touched a tender place in the hearts of Americans, both soldiers and civilians, who were then in the depths of World War II, and it earned Crosby his fifth gold record. "I'll Be Home for Christmas" became the most requested song at Christmas U.S.O. shows in both Europe and the Pacific and Yank, the GI magazine, said Crosby accomplished more for military morale than anyone else of that era.

In December 1965, having completed the first U.S. space rendezvous and set a record for the longest flight in the U.S. space program, the astronauts Frank Borman and James Lovell hurtled back to earth aboard their Gemini 7 spacecraft. Asked by NASA communication personnel if they wanted any particular music piped up to them, the crew requested Bing Crosby's recording of "I'll Be Home for Christmas."

{Source: Wikipedia http://en.wikipedia.org/wiki/I%27ll_Be_Home_for_Christmas}

Here below is "Der Bingle's" version of this beloved and timely classic.

http://www.youtube.com/watch?v=VFGfCn5rKIM

Rudolph

Rudolph the Red-Nosed Reindeer is a character created in a story and song by the same name. The story was created by Robert L. May in 1939 as part of his employment with Montgomery Ward.

Rudolph has become a figure of Christmas folklore. The song tells the tale of Santa Claus's ninth and lead reindeer who possesses an unusually red-colored nose that gives off its own light, powerful enough to illuminate the team's path through inclement weather.

Johnny Marks decided to adapt May's story into a song, which through the years has been recorded by many artists. It was first sung commercially by crooner Harry Brannon on New York City radio in the latter part of 1948 before Gene Autry recorded it formally in 1949, and has since filtered into the popular consciousness.

Probably the most famous version of the song was done by Burl Ives for the 1964 Christmas special of the same name. Rudolph the Red–Nosed Reindeer is a long-running Christmas television special produced in stop motion animation by Rankin/Bass. It first aired December 6, 1964, on the NBC television network in the USA, and was sponsored by General Electric under the umbrella title of The General Electric Fantasy Hour. The copyright year in Roman numerals was mismarked as MCLXIV instead of MCMLXIV. It has been telecast every year since 1964, making it the longest running Christmas TV special, and one of only four 1960s Christmas specials still being telecast (the others being A Charlie Brown Christmas, How the Grinch Stole Christmas, and Frosty the Snowman). And again, as with the Charlie Brown special, Rudolph has now been shown more than thirty-one times on CBS, although in this case, CBS was not Rudolph 's original network. As a side note A certain investment manager of your acquaintance remembers watching this special when it aired for the first time as a little boy! 

Here is Burl Ives as Sam the Snowman singing Rudolph the Red Nosed Raindeer and we'll throw in Holly Jolly Christmas as well!

http://www.youtube.com/watch?v=TT4Cbt95P1k

http://www.youtube.com/watch?v=7WzAyderAKU

{Source: Wikipedia http://en.wikipedia.org/wiki/Rudolph_the_Red-Nosed_Reindeer_(TV_special) }

The Christmas Song.

Prior to World War II how you celebrated Christmas depended largely on what region of the country you lived and what part of Old Europe your ancestors hailed from. It was only in the 20th Century that the marketing potential of the holiday began to take hold. Gradually it has moved away from a religious holiday to a national secular celebration of a season. During and after the War a national concept of Christmas seemed to jell, fueled largely by the World War II bringing people from different regions together and by the newly developed abilities of mass media to transmit music. The Christmas Song is a perfect example of this.

The "Christmas Song”, commonly subtitled “Chestnuts Roasting on an Open Fire“ or “Merry Christmas to You”, is a classic Christmas song written in 1944 by vocalist Mel Tormé and Bob Wells. According to Tormé, the song was written during a blistering hot summer. In an effort to “stay cool by thinking cool,” the most-performed (according to BMI) Christmas song was born.

“I saw a spiral pad on his piano with four lines written in pencil,” Tormé recalled. “They started, ‘Chestnuts roasting ... Jack Frost nipping ... Yuletide carols ... Folks dressed up like Eskimos.’ Bob (Wells, co-writer) didn’t think he was writing a song lyric. He said he thought if he could immerse himself in winter he could cool off. Forty minutes later that song was written. I wrote all the music and some of the lyrics.”

Nobody owns this song like Nat King Cole. The Nat King Cole Trio first recorded the song early in 1946. At Cole’s behest — and over the objections of his label, Capitol Records — a second recording was made the same year utilizing a small string section, this version becoming a massive hit on both the pop and R&B charts. Cole re-recorded the song in 1953, using the same arrangement with a full orchestra arranged and conducted by Nelson Riddle, and once more in 1961, in a stereophonic version with orchestra conducted by Ralph Carmichael. The latter recording is generally regarded as definitive and continues to receive considerable radio airplay each holiday season, while Cole’s original 1946 recording was inducted into the Grammy Hall of Fame in 1974.[1] Mel Tormé himself eventually recorded his own versions in 1954 and again in 1965 and 1992. {Source: Wikipedia http://en.wikipedia.org/wiki/The_Christmas_Song }

Here then is Nat King Cole's most known version of this song.

Nat King Cole-The Christmas Song

Investor Sentiment

This chart comes to us today from Fusion Investments and The Big Picture Blog-one of the best financial reads on the internet in my opinion.  Here's their read on investor sentiment.

"Despite the huge run up in equity prices, sentiment, as measured by invested dollars and equity exposure, as well as surveys, is actually pretty middle of the road.....This suggests that a reversal is not imminent, at least due to sentiment. But it also implies that the negativity that drove the early phases of the rally are no longer present either.

The easy money has been made . . . the sledding now gets more challenging . . ."

Link:  http://www.ritholtz.com/blog/2009/12/us-equity-market-sentiment-review/

Christmas Break.

We're going to take a bit of a hiatus until 2010. That doesn't necessarily mean that we're going away right now but I thought we would do something different during Christmas week. Because the markets will largely be on cruise control until January I thought we would break from the usual reporting on markets and look at the origins of some of the most lasting and beloved images of Christmas this week. We will be taking time off between Christmas and New Year's on a little family R&R. We'll break in though if there is something significant to report. See you in 2010!

Decade 2000's Market Data-Part IV

Finally this last piece of data courtesy of Direxion Funds: 

FUTILITY ENDS - When the Boston Red Sox won the 2004 World Series, it was their first title in 86 years. When the Chicago White Sox won the 2005 World Series, it was their first title in 88 years (source: BTN Research

Comment:  The Chicago Cubs are still looking for a title 101 years into their own personal championship draught!  But there's always next year!

Decade 2000's Market Data-Part III

More Decade in Review data from Direxion Funds.

OUT OF BUSINESS – The 10 largest bankruptcies in US history (based upon assets held at the time of the bankruptcy filing) occurred during the decade of the 2000s (source: BankruptcyData.com).   Comment:   Enron, AIG, and Lehman Brothers are the poster children for corporate malfeasance in this decade.  

THE WORST STORM - Hurricane Katrina struck the southern coast of the USA on 8/29/05. Katrina had winds of 175 mph, caused more than 1,300 deaths and inflicted at least $80 billion in damages, the costliest storm ever in US history (source: National Oceanic and Atmospheric Administration).   Comment:  I went down with my church to work two summers in Biloxi which took a direct hit from Katrina.  Everything 600 yards in from the shore was gone.  Pictures never did justice to the damage!  Those people are just now getting back to normal almost 4 1/2 years later!  God bless em!

PRICEY HOMES - The nationwide median sales price of new homes sold in the country during March 2007 reached $254,000, an all-time record high (source: Census Bureau).  Comment:  Housing is looking like it is starting to bottom as a combination of demand, affordability and lower interest rates are starting to eat through the supply.

BIGGEST SCAM - A magazine article questioning the legitimacy of Bernie Madoff’s investment strategy (titled “Don’t Ask, Don’t Tell”) appeared in print on 5/07/01, 7 ½ years before his record-setting Ponzi scheme was discovered in December 2008. Total customer losses in the scam were $19.4 billion (source: Barron’s).   Comment:  Madoff could have easily been discovered if investigators had really been willing to take a look at what he was doing.

RECORD DEBT - During fiscal year 2009 (i.e., the 12 months ending 9/30/09), the US collected $2.1 trillion of tax receipts and spent $3.5 trillion, resulting in a $1.4 trillion deficit, an all-time record (source: Treasury Department).

Link:  http://marketing2.direxionfunds.com/?elqPURLPage=7&elq=357be72266b449c19f0dd01887f8d249

an tSionna: 2003-2007 Bull Market.

I don't know why I didn't just publish the whole sequence of the previous bull market the other day.  Here it is as represented by the S&P 500.  The chart should explain itself.  The numbers that I come up with for that period are slightly different due to the fact that I haven't added in dividends (which would add about 2% per year I think) and that my calculating period is different than other commentators.  I can go into why this is at some point if readers want to better understand my thinking.

*Long ETFS related to the S&P 500 in client accounts.

Decade 2000's Market Data-Part II

More Market Data courtesy of Direxion Funds.

TWO BULLS - The S&P 500 experienced 2 bull markets during the current decade. Over the 5 years beginning on 10/09/02, the S&P 500 gained +101% (change in the raw index not counting the impact of reinvested dividends). Since 3/09/09 (i.e., 9 months ago), the S&P 500 has gained +64% as of the close of business last Friday 12/11/09 (source: BTN Research).

TWO BEARS - The S&P 500 suffered through 2 bear markets during the current decade. Over the 2 ½ years that ended on 10/09/02, the S&P 500 lost 49% (change in the raw index not counting the impact of reinvested dividends). Over the 17 months that ended on 3/09/09, the S&P 500 lost 57% (source: BTN Research).

RECORD HIGHS - Numerous record highs were set during the decade, including the price of gold ($1,217.40 an ounce set 12/03/09), oil ($147.27 a barrel on 7/11/08), gasoline ($4.114 a gallon on 7/16/08), the euro ($1.6038 on 7/15/08), the S&P 500 (1565 on 10/09/07) and the NASDAQ Composite Index (5049 on 3/10/00). The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system (source: BTN Research).

RECORD LOWS - There were also record lows set during the decade, including the lowest nationwide average interest rate for a 30-year fixed rate mortgage (4.71% set on 12/03/09) and the yield on the 10-year Treasury note (2.06% set on 12/30/08) (source: BTN Research).

Comment:  What worked so spectacularly well in the 90's. i.e. technology and growth stocks, seriously underperformed this decade.  Energy and natural resources plays were some of the big winners in the 2000's.  If one followed this logic then one could expect for technology, healthcare and financials to do well in the next 10 years.  {Just a spur of the moment thought, not a prediction or a thesis as I've not done enough work on this to want to test the idea!}

Link:  http://marketing2.direxionfunds.com/?elqPURLPage=7&elq=357be72266b449c19f0dd01887f8d249

*Long ETFs related to the S&P 500 in client accounts.

Decade 2000's Market Data-Part I

The folks over at Direxion Funds have compiled some interesting data on stocks during this decade and I thought we'd spend some time looking at it over the next couple of days.  {Highlights Mine.}

STOCKS BY THE DECADE - With just 3 weeks remaining in the decade (i.e., the 10 years from 1/01/00 to 12/31/09), the S&P is down 9.9% in aggregate for the period on a total return basis. That performance would be the worst decade ever for the stock index, falling below the negative 0.3% performance achieved during the 1930s. The best decade ever for the S&P 500 was the 1950s, a 10-year period when the stock index gained +487.1%. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: BTN Research).

BEST AND WORST YEARS - The best calendar year performance for the S&P 500 during the current decade was 2003 when the stock index gained +28.7% (total return). The worst performance took place last year (2008) as the S&P 500 lost 37.0%. With just 3 weeks remaining in this calendar year, the S&P 500 is up +25.4% YTD, giving the index a chance to still surpass its 2003 performance (source: BTN Research).

RECESSIONS - The US had 2 recessions during the decade. The first downturn lasted 8 months and ended on 11/30/01. The second recession began on 12/31/07 and is officially still ongoing as of today (source: NBER).

Comment:  The underperformance for this decade was virtually guaranteed by the 2000-2003 Bear Market.  That decline put stocks so far behind the eight-ball for the decade that nothing short of a steller period of returns the rest of those years would have enabled the index to catch up.  The crisis of late 2007-2009 sealed this decade's fate.  The 2008 decline virtually equals the worst years return during the Depression years of 1932-1933.

Link:  http://marketing2.direxionfunds.com/?elqPURLPage=7&elq=357be72266b449c19f0dd01887f8d249

*Long ETFs related to the S&P 500 in client accounts. 

an tSionna: 2004

I mentioned yesterday that there seems to be a developing consensus that next year could be a lot like 2004. 2004 has been viewed as a trending listless year as stocks digested their huge gains off of the Gulf War lows.  I've talked in the past about 2004 in relation to the fact that most of the gains in the last bull market were front end and back end loaded.  That is the period from March 2003 to early 2004 and July 2006 to July 2007 saw the lion's share of the gains for that Bull Period.  That leaves a whole lot of time {a bit over 2 years and 3 months} where stocks didn't go up much.  In that period stocks gained just a bit over 8% or approximately 3.3% annualized (not including dividends).

The chart above mostly shows 2004 and you can see how the market performed.  Like 2005 it was a barbell year with stocks doing much better early and late in the year.  2004 was also a presidential election year and that may have influenced much of the action from mid-spring to late summer. 

If we are going to see a repeat of 2004 then we will have to be ready for more of a trading environment than we have seen this year.  If that is the case we will have to dust off those pages of the game plan because we haven't seen that type of action in quite a long time.  However I would caution you that the trading environment scenario is rapidly seeming to become Wall Street's consensus of what is likely to emerge next year.  Because of that I would remind you of the old saying, "Markets will do what they have to do to prove the most amount of people wrong." 

Since the economy still seems to be recovering, it seems less likely that stocks will stage a major decline next year.  However, if we should begin to see better economic data then we should not discount the possibility that stocks could see another big rise similar to 2009 at some point.  Not saying that's going to happen but I think we have to be aware of that scenario as well as what everybody else seems to be expecting.

*Long ETFs related to the S&P 500 in client accounts.

Barrons: A Really Different Rally, Again.

I'm excerpting this piece which ran in this weeks Barrons. The investment manager they quote is not me but we share some of the same views about things going forward. {Highlights mine. link at the end.}  Note as well that the discussion below about the stock market mirroring its 2004 performance is one that seems to be increasingly viewed as consensus for next year. 

"SO, THERE'S THIS GUY WHO E-MAILS ME his market outlook every so often. Actually, a lot of guys do this, and all of their offerings are happily accepted, if only for what they hint about prevailing investor attitudes. But this particular guy is unique in at least two respects. He has no interest in having his name placed in print or pixels. And he is the one commentator I'm aware of who both turned aggressively bearish virtually at the all-time market peak in 2007, then in April began insisting that the March market lows would not be challenged, and that a new cyclical bull market had a long way to run.

I'm sure there were others who can claim a similar achievement. And there were plenty who were bearish for a good long while on the way up, then more optimistic at some stage of the market washout; maybe some even caught most of the rebound. This guy, though, is the one whose dispatches I saw as the very uncertain market trajectory took shape, illuminating the real-time contrast between his high levels of conviction and clarity and the deep ambivalence and confusion enfolding most of us.

He doesn't claim any magic formulas or proprietary systems. His approach is eclectic and inclusive, ranging among economic, technical, historical, valuation and sentiment inputs. He's in the business, as a broker, and shares his missives with clients. And he still doesn't want to be identified. But his current thinking isn't less valuable for being presented without attribution....

....{He believes that t}he severe decline, having morphed into a global financial panic, culminated in a shorter, more painful span than he or most any other analyst anticipated. Our guy figured the stock-market downside wouldn't be done until 2010. But prices collapsed so rapidly that by April he made the call that the low was in, would not be re-tested and a new bull market was upon us.

....Keying off credit improvement, profoundly panicky investor sentiment, an incipient pickup in leading economic signals and much more, he wrote: "We are very unlikely to have a retest of our March 9 low. Don't expect a big pullback until the S&P 500 reaches the 930-940 level within the next two months [remarkably spot on]...The S&P should reach 1300 by next March."


....With his latest effort, "Ready to Breakout," from last Monday, he pushed back against some common critiques of the recent market repeatedly stalling just above 1100, where we now sit.

-To the observation that riskier, smaller and financial stocks have underperformed since mid-October -- presented as signs of a maturing rally -- he notes that this occurred from early May to early July as well, before the former pattern of rising risk appetites resumed.

-It's become common to point to the extreme low 17% reading for admitted bears in the recent Investors Intelligence investment-adviser survey as a sign of too much optimism for stocks to continue higher. It can't be dismissed as irrelevant. But the percentage of bulls was 48%, a not-very-alarming level, with an abundant 35% of folks expecting a correction -- the most in many years -- accounting for the balance.

-He adds that in blast-off rallies from depressed levels such as this one and the one in 2003, the rally's end is usually accompanied by much more overbought conditions and enthusiastic psychology than we now see. This was true for sure in late 2003, based on a sampling of sentiment measures laid out by Ned Davis Research last week.


-Our guy writes that he's "dumbfounded by the refusal of the media, investors and economists" to acknowledge the prospect of a V-shaped economic recovery given the pace of improvement in employment, industrial production and leading indicators.  He's calling for the S&P to run to 1200 or to 1250 by mid-January, hitting a high some time in the first quarter, followed by a 10% correction into late summer or fall, but not one leading to a resumption of the post-2007 downtrend. This would echo, roughly, the 2004 market, in which the economy improved as the market had anticipated but most of the equity upside was inked in the prior year.
No one has a monopoly on predicting the future; no one even holds the franchise rights. And this particular streak of expert trend-riding could end any time. But if any forecasters are ever worth lending an ear, the ones who exhibit mental flexibility and analytical rigor are most worth it."

Link:  http://online.barrons.com/article/SB126057496212588073.html?mod=BOL_hps_popview#articleTabs_panel_article%3D1 {Subscription may be required.}

*Long ETFs related to the S&P 500 in client accounts.

Trading Range

Stocks have been locked in an ever tightening trading range since Autumn. This can be seen in the chart above. Look at how the range has narrowed in the past month. Market action has been characterized by very few sectors that are outperforming and little momentum to either the upside or downside. It seems that every time stocks look like they are going to make a move a counter trend develops. We've chronicled this by showing triangle patterns in certain indices this week. Triangles indicate that resolution could come soon to a trading range. Let's look at factors for both upside and downside below.

Tight trading ranges such as this can provide the base for a strong move to the upside if stocks break out that way. Also the more times a stock or ETF bumps up against resistance (or support) the weaker that trend line becomes. That's because the buyers who originally may have bought at that level at least have the opportunity to get out somewhere close to even. Many of these current resistance lines especially on major market indices are close to the levels from which stocks crashed last year. In other words overhead supply is being eaten away. This corresponds to certain public markets data that shows that individuals have been net sellers of stock over the past two months.

Markets also tend to stay with their trends and for this market, the trend has been up since March. Add to that the positive seasonal factors and we could see a market that makes a pretty good move at some point. That point (if I had to place a bet) could be early in the new year.

However, since this is a trading range we must be prepared for what to do if stocks break to the downside. That is why the game plan is so important. Indeed there are a few things we need to watch. Energy stocks & gold have really been hit hard recently. Stocks unwillingness to move higher could be a precursor to a stronger move to the downside, particularly if profit taking should set in either at year's end or early in 2010. Also I think it will be hard for stocks to move higher without the financial sector which has now underperformed since this summer. Fundamental and valuation factors could also be used to buttress a bearish case as based on this year's earnings stocks seem to be fairly valued by some in the 1050-1125 range on the S&P 500. Bears would also argue that the economic picture is still bleak (unemployment etc) and that conditions not only don't warrant further upside hear but stocks could head down in the new year.

I don't know for sure where we're going come January 1. I have some ideas about this which I will share with you in the coming weeks. For now we'll just watch and wait and let our indicators be our guide.

*Long ETFs related to the S&P 500, energy and financial sectors in client and personal accounts. Long ETFS related to gold in certain client accounts.

Happy Hanukkah

an tSionna 12.09.09 Q's

For a change I thought I would show something besides the S&P.  Here is the NASDAQ 100 ETF {QQQQ}.  I think the Nasdaq has been showing better relative performance than the S&P recently.  This might be partly explained as money managers look to end of the year performance window dressing by adding well known tech names to their portfolios which this index has in abundance.

*Long QQQQ and certain other ETFs relating to the NASDAQ in certain client accounts.

Citibank

-Citigroup rumoured to be in negotiations to repay TARP funds. Source CNBC 
{Long Citigroup in certain client and personal accounts.}

The Credit-less Recovery

This was posted yesterday @ 24/7 Wall Street.

The economic recovery can only carry so much weight before it gets bogged down. It already faces unemployment that is 10% and may rise into next year. In 2011, personal and business taxes are scheduled to rise which should cut into spending.

Now, The Federal Reserve reports that consumer credit is still contracting and fell $3.5 billion in October.

It is hard to make a case that the economy can stage an even modest recovery if the use of credit, especially by consumers, continues to contract. Holiday spending so far has been slightly above last year, according to a number of private research firms and retail associations. That may not hold as shoppers hit the critical last two weeks of activity before Christmas. Buyers visiting malls and stores may begin to look at credit card balances and ask themselves if they can pay them down next year. That is if their lending institutions have not already capped what they can spend on the cards.

There will not be a “credit-less” recovery. That is too much of what Ben Bernanke calles a “headwind.”

Link:  http://247wallst.com/2009/12/08/the-jobless-recovery-is-joined-by-a-credit-less-one/#more-55296

Employment

Chart of The Day compares job losses in this recession to past economic declines.

"{Last Friday}, the Labor Department reported that nonfarm payrolls (jobs) decreased by 11,000 in November -- the smallest decline since the recession began at the close of 2007. {This} chart puts that decline into perspective by comparing job losses during the current economic recession (solid red line) to that of the last recession (dashed gold line) and the average recession from 1950-2006 (dashed blue line). As today's chart illustrates, the current job market has suffered losses that are more than triple as much as what occurs at the lows of the average recession/job loss cycle.

Link:  https://www.chartoftheday.com/  {Subscription may be required}.

Still At Sea

USS Arizona {BB-39} departed Naval Station Pearl Harbor 0806 hours Hawaii time December 7, 1941. Sill listed at sea by the United States Navy.

an tSionna 12.04.09

*Long ETFs related to the S&P 500 in client and personal accounts.

Another Money Flow Example

I was again asked to do some money flow analysis on a company that a client of mine has an interest in.  Since I've done the work, I thought I'd publish it here again as an example of our analytics.  Again please note that I've attempted to remove all the pieces of information that would identify this company as I want this to be an illustration of our work. I don't want it to be perceived as a recommendation to buy or sell this security. As of this writing I do not own any of this either personally or for clients although that could change. If you are a casual reader of this blog please do your own homework or consult your own investment advisor if you can somehow figure out the name of this stock. 

GE: Cash Rich, Strategy Poor

GE {GE}: Cash Rich, Strategy Poor-Source 24/7 Wall Street.

GE (NYSE:GE) will pick up close to $8 billion in net cash as part of its deal to pass a majority interest in its NBCU unit to Comcast (NASDAQ:CMCSA)leaving the conglomerate with 49%. GE has not done much with the businesses that will be left when its entertainment business is gone, so investors will have to ask if a cash-based balance sheet improvement will do anything for the firm’s share price.

GE’s stock is still 55% below where it was two years ago compared to the DJIA which is off about 20% during the same period. That is an abysmal performance for a company that was once considered the best run large firm in the world.

GE will still be left with a motley group of businesses, except, perhaps, for its large infrastructure operations. Concerns about the company’s capital finance balance sheet have not gone away but have abated some. At one point there was a fear that {it's balance sheet problems} could take GE under. In the September quarter, revenue at the unit took a terrible fall from $17.3 billion in the same period last year to $12.1 billion this year. Operating income fell even further from $2 billion to $263 million. GE has made a reasonable case that it is not facing huge write-downs in its financial portfolio from consumer credit assets, toxic instrument holdings, or commercial real estate. But, GE has not made a persuasive argument that earnings at the division can recover quickly.

GE’s real revenue and earnings engines are its technology and energy infrastructure businesses. The company’s energy and oil and gas businesses have been hurt by lower equipment sales. GE’s technology operations have been damaged by slow sales of aviation, healthcare, and transportation products.

GE’s challenge in making a case to Wall St. is based on the argument that it is better off without NBCU. The divesting of the entertainment and news operation will help it focus on “core” business. The flaw in the argument is that these core businesses are not growing any faster than global economy and in some cases are lagging. GE’s earnings may be nothing more than a proxy for worldwide GDP. If so, the company has no story to tell.

Link:  http://247wallst.com/2009/12/03/ge-ge-cash-rish-strategy-poor/#more-54878We talked about GE in a series of articles back in February.  In my final analysis piece I said this:



"....However, it is my opinion that GE is not the company that it once was. It is now apparent that there has been more risk on its balance sheet through GE Capital than investors once thought. This is likely over time to compress its stock market multiple. I therefore believe that should GE get back to those $20 levels, investors should reevaluate their long term commitments. We will again review the stock for you should it at some point in the near future advance to those levels."
Link:  http://lumencapital.blogspot.com/2009/02/ge-analysis-part-vi.html

I have seen nothing in the past year to change that assessment.  I think GE will continue to be a solid blue chip company with a low single digits growth rate.  It will likely work to continue to increase its dividend which currently pays about 2.5% and should be able to grow its stock price between 4-10% a year in a good economy.  Now if it can do that rate of growth longer term ,that is not so bad for appropriate types of investors as it would imply a total return based on today's price and dividend of 6-12%.  But unless GE changes its strategy, its glory days as a quasi-growth stock seem likely behind it.

Link:  http://247wallst.com/2009/12/03/ge-ge-cash-rish-strategy-poor/#more-54878

*Long GE in certain legacy client accounts.  Long GE options in one client account.  Nothing here should be construed as investment advice or a recommendation to buy or sell GE stock.   

Market Thoughts 12.03.09

Investors have been surprised by the market's strength this year. I should probably say that it is traders who have been surprised because it seems as if there are no investors left anymore! Investors were particularly surprised how stocks shook off the Dubai debt crisis and probably did not expect Monday's rally. We chronicled our opinion that this was more a "Sell The News" reaction here:  http://lumencapital.blogspot.com/2009/11/tsionna-113009.html  

On Monday stocks were strong with broad-based gains in many sectors. Stocks staged a carry over day yesterday, consolidating the previous move.  Speculation seemes to have come back as Nasdaq volume picked up. Gold in particular was strong as were certain sectors like agriculture and technology. Certain indices are near their highs for the year. Seasonal patterns particularly regarding the Dow Jones Industrial Average (discussed yesterday) would suggest that stocks could move higher between now and year's end. Money flows are positive as well.

Under the surface though there are a few things we should watch. Several of our money flow indicators are trekking to overbought status. Certain sectors have been underperforming, in particular banks and financials seem to be unable to gain any traction among investors. Recent market breadth has also been quite narrow although this has improved this week. Small-cap stocks have also not participated much in recent weeks and while some market indices such as the S&P are near their highs, they have repeatedly bumped up against major resistance levels and dropped back.

Investors have not been fond of these markets since mid-summer. As one market pundit put it "the attitude of many investors is stocks are acting well & I'll stick with them, but I don't trust them very much and I'll be quick to sell at the first sign of trouble." 1. We've noted before that part of what has caused the market to rise this year has been investors taking the Armageddon scenario off the table. That has likely been what's brought us to the point where we trade today. However many investors have a hard time justifying the market's trading patterns with the bleakness of the economy. This skepticism may become more established next year but for now it will likely take a backseat to end of the year patterns and Wall Street's desire to get paid for a good year.

*Long ETFs related to the NASDAQ, Energy, the Dow Jones Industrial Average and the I Shares Russell 2000 in client accounts.  Long ETFS related to Energy, banks and financials, gold & the S&P 500 in client and personal accounts.

1. Doubt If You Must, But Respect the Action. James DePorre, RealMoney.com http://www.thestreet.com/b/rmoney/revsharkblog/10636546.html

Gold & The Dollar

From Chart of The Day:

"Thanks in part to mounting US deficits and a weak US economy, the US dollar continues to trend lower. After all, a virtual collapse of the banking sector does have its consequences. For some perspective, today's chart illustrates the current trend in the US dollar (blue line) as well as that other world currency, gold (gray line). As today's chart illustrates, the performance of the US dollar has varied inversely to that of gold since the latter stages of the credit bubble. It is worth noting that the US dollar is currently testing resistance of its downtrend (red line) while gold makes record highs."

*Long ETFs related to Gold in certain client accounts.

Link:  https://www.chartoftheday.com/  {Subscription may be required}.