As we discussed a couple months ago, the markets are churning. Our decision to remain on the sidelines becuase you wouldn't miss much was good advice. We considered the post Thanksgiving Day bull bet; however, decided to enjoy family and friends instead. The markets have been churning in a tight range with no real direction. The daily movements are only for the gamblers and insiders at this point. The markets are looking for a catalyst.
Update: The technicals do not bode well. There is a 40%-50% chance of forming another double-top. Retail interest and confidence in the markets continues to wane. Our observation of the trading floor is that nothing is happening. The traders look bored. The financial media continues to churn out old news and soveriegn grandstanding. Quite frankly, there is no news or it is being recycled. Volatility is aproaching 6 months low and the trade junkies are closing out their positions for the year.
Strategy: Wait and Watch. Pick low points. Resist the urge to action because you are bored. The trades will present themselves as they drift lower to attract action. Our guess is that 2012 will begin with a volatility wave.
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