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WALL STREET CRAPS STOCK MARKET OBSERVATIONS FOR DECEMBER 7, 2013

December 7th, 2013

craps front coverMARKET OBSERVATIONS FOR December 7, 2013: The stock market had a mild 5-day correction after hitting its 13th consecutive new high in the DJIA. Yesterday (Friday Dec. 6th), the market snapped back with a rally that puts it into position to retest the previous week’s highs. That retest will occur early next week and could produce a new closing high. My hunch is that this retest will fail and clear the way to a more substantial correction shortly afterwards.

Key underlying market indicators show the following:

For now, my advice for traders and investors is to remain of the sidelines and watch for short term buying opportunities in alternative oversold asset classes. Those would include real estate (IYR), long-term Treasury bonds (TLT), emerging markets (EEM), silver (SLV), and gold mining (GDX). Other stocks that could experience tax-loss selling in December and may be worth picking up for longer-term holdings include: IBM, CSCO, and AT&T.

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