- I was thinking about my market predictions for 2006. I've decided not to make any. Instead, there are some themes that I'll be watching. First, everyone seems pretty gloomy about 2006. I've heard "recession" and "bear market" mentioned by quite a few. And I'm not talking about the folks who are always bearish or always bullish, but the folks who attempt market timing. Next, I've heard the election cycle mentioned a few times. That's where we get some dramatic sell-off during these non-Presidential election years, followed by some dramatic rally. I've also heard folks opine that since January was bad last year, that means it'll be bad this year, too. I thought back in early October that the market (SP500) would rally around 10% from that point, which would put us around 1300 or so. So, these are the themes we open 2006 with: Fear of recession; potential election cycle pattern; bad January; and SP500 at 1300.
- I still think the market is in a bull phase that began in September 2002 (or March 2003, for those watching the "retest" at the time). So, pullbacks will be bought and the trend should be higher.
- Have you noticed that the most likely creek to flood during rain storms seems to always be named "Dry Creek?" Why is that?
- Political themes for 2006? Will the Democrats gain back the House and/or Senate? I think they can increase their numbers by a few, but the GOP should remain in control. The wiretap stuff will probably be the Democrat reason du jour to hate Bush. (Personally, I think anyone calling 1-800-Al-Qaeda is probably suspicious in the first place.)
