More Flee For Quality...

More investors fled for quality today, not wanting to be caught by the quadruple witching and the weekend ahead, causing the Dow to drop over 200 points and further depressing bond yields.

Even though the drop today was pretty disappointing to those investors expecting a Santa Claus rally, it did not change anything on the technical front. The Dow continues to be in an extremely uniform short and intermediate term neutral trend with strong resistance at 9000 points. I do expect this neutral trend to continue within a channel of about 9500 to 7500 points due to the strong support offered by the Dow's monthly 200MA. I hope this neutral trend will breakout to upside in January on a strong January Effect and then followed by peak unemployment numbers and a recovery in the stock market for the rest of 2009. :) What is the January Effect? The January effect is a phenomena where the first few trading days of January are usually strong up days and more frequently end January itself positive. However, the January effect is so popular for so long that its effects are already wearing out year after year as speculators take position in December or even as early as November.