Jamie Dlugosch

Don't Find Yourself on the Sidelines

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Jamie Dlugosch takes a look at the hottest topics to keep an eye on throughout the day.

I've got my rally cap on. Do you? Forget about missing a one day rally by sitting on the sidelines as the buy and hold proponents suggest. Instead, you ought to be worrying about a multi-day, month, year move that can really be powerful.

Amazing what the turn of the calendar will do. One day after a very small amount of profit taking the market put another notch in the recovery belt. While this move may come crashing down eventually, I would not want to be sitting on the sidelines criticizing the move as some are doing.

The Dow hovered near a triple digit gain most of the day. A better reading on factory orders, or at least not as bad as expected, helped the bulls keep the upper hand. The market gave up some after spending a short amount of time in triple digit territory.

Word from the Federal Reserve did not help matters. Expectations are for a recession throughout the year and possibly beyond. Previously such utterances would have resulted in a big fall. This time, not so much. That alone is a very bullish. Don't blink. You might miss a great ride.

Oil prices breeched the $50, but retreated on concerns about the economy. The move coincided with the release of Federal Reserve minutes suggesting that a recession in the U.S. would last at least through 2009 and maybe more.

Crude closed the day down $.23 to $48.58. With short term economic news expected to be poor look for crude to hold at these levels. OPEC will need to step in with additional production cuts if demand destruction continues as expected.

Of particular note is the move in oil related stocks. They have been on fire so far in 2009. Look for this group to blow away other sectors for the entire year.

Year end earnings numbers will begin in earnest next week. Are we getting a preview with Alcoa's announcement that they are trimming 13% of its global workforce and reducing production? The news is a sobering reminder that the last quarter of 2008 truly was a train wreck. With this news expect results when released to be weak.