Weekend review of financial markets analysis as we close 2009 and look toward 2010

A great roundup this weekend. To start:

Be sure to look and listen to Terry Laundry's T Theory Observations today at http://www.ttheory.com/

Here's his intro:

Update for Sunday December 27 2009. Todays discussion is a general end of year summary of the current bull market, where is is going, and the big problems likely when it ends in August 2010 See the charts below with their Audio Comments.

Next - Mike Burk looks at the four years of the Presidential Cycle and specifically the last 4 trading days of the 1st year in it, which have a high probability of being positive. As well as the 2nd year probabilities, which apply to 2010. In his Technical Market Report, at Safe Haven 12/26/09, http://www.safehaven.com/article-15349.htm.

He also looks in depth at the 2nd year within this cycle, which is what 2010 will be here's a tiny quote but click to read his full analysis (even though we're not going to assume the year will track exactly):

2010 will be the 2nd year of the Presidential Cycle, which, on average, has been the worst of the 4 years in the cycle. .... [T]he tendency for weakness from early May through early October has become more pronounced.

Schaeffer's Monday Morning Outlook: A Very Merry Dow and SPX Crack Resistance Levels. One of the points made by Rocky White is that the upcoming year doesn't have very much statistically-based reason for optimism as 2009 - could go either way, net positive or net negative. And Todd Salamone in his report this weekend, states that for the near-term outlook, sentiment supports more upside, but then: "As we head into the last week of trading in 2009, we see short-term support for the SPX at 1,115-1,120; should this area break, look for additional support at 1,100. On the upside, we view 1,155 as the next target, site of the index's 160-month moving average. This trendline marked the bear-market low in 2002.". You'll enjoy reading the whole article including graphs and tables - here's their introduction paragraph:

Santa Claus came to Wall Street a little early this year, as the major market indexes edged higher on strong earnings and positive economic reports. All three major market indexes finished the holiday-shortened week at their highest prices of 2009. The Dow finally cracked the 10,500 level, although it was on light trading volume, casting this strength in a small shadow of doubt. Regardless, the market finished the week firmly in positive territory, leaving investors to a long weekend filled with holiday cheer. Looking ahead, Todd Salamone, Schaeffer's Senior Vice President of Research, notes that sentiment may be shifting among options players. Next, Senior Quantitative Analyst Rocky White takes a closer look at the "lost decade," and what it means for the Dow following a weak 10-year period. Finally, we wrap up with a look at some key economic and earnings reports slated for release this week.

On the Santa Claus Rally and Other Year-End, New-Year Indicators-- by Prieur de Plessis, at Seeking Alpha.

He quotes Jeffrey Hirsch of the Stock Trader's Almanac for much of the interesting data on what's typical for the end of this year and into next year.

ADDED 12:00 - STOCK TRADER'S ALMANAC BLOG: New Year's Wishes / 2010 Forecast.

For their 2010 forecast they cite the Presidential cycle among other factors, with a forecast very like what that cycle generally predicts for the 2nd year. At http://stocktradersblog.blogspot.com/2009/12/new-years-wishes-2010-forecast.html.

And they make some other predictive comments, about which my best advice is "perhaps - but we'll see, and let the 2010 highs tell the story":

From the depths of the worst bear market since 1932 the current bull market was born on March 9, 2009. The rally has been fast and furious with a mild pullback in early summer and sideways action the past five weeks. The debate is on whether this is just another cyclical bull or the beginning of a new longer term secular bull that spans a decade or more. We are leaning towards the secular camp and expect the 2009 lows to hold. Save some catastrophic events or galactically stupid moves by our government we should be on the road to full recovery.

STOCK TRADER'S ALMANAC BLOG: Free Lunch Aged One Day. This blog post shows the stocks they believe will show good gains into mid-January, as short-term swing longs to be sold for gains once
sizable gains occur about that time frame (since their "Free Lunch" method says the gains may be short-lived): http://stocktradersblog.blogspot.com/2009/12/free-lunch-aged-one-day.html.

Andy Askey's Price Time Volume Investing — Stock Market Cycles, Gann Angles and Squares - Views of the dollar and bonds (rates), 12/13 at http://ptv-investing.com/blog/.

Dr. Brett Steenbarger's new post, TraderFeed: What I See Among Many of the Best Traders.

Dr. Brett Steenbarger's Become Your Own Trading Coach: Indicator and Trading Pattern Posts - Volume One.

All Allan: Decennial Pattern in Stocks (quoting from EWI's Robert Prechter), at http://allallan.blogspot.com/2009/12/decennial-pattern-in-stocks.html.
Readers who want more info on the Decennial cycle pattern can click the "Cycles Review" label to locate Part X on that topic, including a depiction of that pattern (similar to the one I referred to when questioning Prechter's views about a top in early 2007, when the pattern suggested the high would be in the autumn - which did turn out!).
Just so readers here know - I don't agree with the view of a huge "wave three" down in 2010, as Prechter touts, but do agree there should be a significant drop or two during the year (especially after mid-January, and after a top that can appear on or between May/August) - and it's worth knowing about the Decennial pattern.