The stock market enjoyed a nice rally on the first trading of 2009 Friday. The Dow closed above 9000 for the first time since December 8th, and has broken out to a six week high. In fact, all of the major averages closed at new highs since the late November lows. The only negative to Friday's trading was the light volume, which was to be expected. We'll need to see some follow through next week on heavier volume to get more confidence in this rally.
In other markets, Treasury prices sold off sharply on Friday, breaking some minor technical levels. It appears that at the very least, a near term top is in for these markets, as yields have dropped to unattractive levels compared to equities.
Some of the money flowing out of Treasuries also appears to have found its way back into commodities as of late, especially the energies. The February crude oil contract has rallied over $10 in the last week of trading. Precious metals and some agricultural contracts have also managed to rally in the last week. Watch for continued strength in commodities and weakness in Treasuries if the stock market continues to rally.
Scott Cole
www.bestdaytradingstocks.com
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