Santa Claus Rally?

Merry Christmas to all! Here I am sitting here after shot after shot of whisky writing about the market. I have to say, it is times like this when the mind works uninhibited and inspiration flows straight from the brain (sedated and a little high).

In my 8 years in the market, I have paid attention to the smallest details and the biggest moves. There has never been a boring moment and I have to say to all my dealer or remisier friends, be glad that you are in the most interesting job the world can offer.

Ok enough of sentiments, now back the important stuff. The week has been rather boring with the mood of Christmas in the offing. The markets have managed to break the 2800 points convincing and we are at 15 month highs. Personally, I feel that Singapore's bourse being strongest in the face of Shanghai and Hong Kong dropping has been due to the optimism of a strong recovery driven by mainly the 2 IRs to be opened in 2010. The other market that has looked very strong and I have a gut feeling it is going to be the outperformer for at least 1H2010 will be the Nikkei. Historically, the worst performing market for the year before will be an outperformer in the next year. The yen is expected to fall the coming year and the only worry is that the Japanese sovereign debt gets the downgrade. But that is highly unlikely as the Japanese Debt is mainly held by their own citizens unlike the US. So it is very unlikely that the Japanese citizens will come and ask for their money back. So I will be looking for niche Japanese stocks which fits my value criteria. Which is very stringent. I have said many times to others, price is what you pay, value is what you get.

So go forth and seek out the value plays for the next year.

A word of caution, the technical charts for Shanghai and Hang Seng do not look good. They not managed to hit higher highs and if they breakdown and hit lower lows, it is a tell tale sign.

I have a few ideas up my sleeve but I will let you guys know as time passes as more work needs to be done.

I have been wrong about the US dollar hitting the markets. I may be wrong now, but I am sure if the US dollar keeps rising, we are going to be in for an interesting ride.

Best Christmas Wishes,

SVT