Friday, December 31, 2010

Happy New Year Wall Street Cheats; Silver the Big Winner

Equity traders and other market participants are probably happy this week is over.

Finishing up with the worst volume of the week - a week that witnessed the slowest level of trading activity in ten years - indices finished with a split decision once again.

Eschewing with the normal banter that would accompany a normal trading session, since today's was anything but normal, let's just move on to 2011. Beginning Monday, January 3, this column will feature predictions for 2011, as most of the mainstream predictors have fallen into the Kool-Aid drinking bullish category, we will offer some contrarian views.

Dow 11,577.51, +7.80 (0.07%)
NASDAQ 2,652.87, -10.11 (0.38%)
S&P 500 1,257.64, -0.24 (0.02%)
NYSE Composite 7,964.02, +12.11 (0.15%)

Advancing issues and decliners were almost evenly split, with gainers taking a narrow edge, 3257-3189. There were 86 new highs on the NASDAQ, to just 8 new lows. New highs on the NYSE numbered 104, while only 4 issues touched new lows.

NASDAQ Volume 959,300,187.50
NYSE Volume 2,148,760,500

The short-term shake-out in crude oil futures didn't even make it until the end of the year, with speculation taking the front-end contract up $1.54, to $91.38, something of a portentous final trade leading into the new year.

Gold finished with a nice gain to close out the year, up $17.50 on the continuous contract, to $1421.60, just ten dollars from its all-time high. Silver turned in the best performance of the year, a gain of 45 cents today sending it to $30.91, its highest point since 1980, and good for a gain of 83.7% on the year.

Gold and silver have been recommended so often here that it hardly needs repeating, but all prospects appear ripe for continued flight, away from fiat money and paper securities and directly into commodities and hard assets. Silver's massive run-up in 2010 might only be a precursor for a long, durable rally that will take the second precious metal to unimagined heights in 2011 and beyond.

Silver's rally, having started later than that of gold, may have more juice for steadfast holders and even new buyers. It is shaping up to be the century of silver. With sovereign fiat paper money stressed around the globe, even small, casual investors are making their way into the precious ore that seems ready for another monster run in coming months.

Farewell, 2010. Happy New Year!

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