Diary of a Financier

Lookback: 2011 in Review

In Capital Markets on Fri 30 Dec 2011 at 18:32

I’m not delving into the nostalgic or the “top ten” list thing.  I just wanted to revisit my New Year’s Outlook from January 6, 2011.  Upon that date, I covered 5 asset classes of the macro genre, and my calls on all 5 were correct:

1. S&P 500: After reaching resistance @ $135, SPY’s immediate reaction will hold the key to its 2011 performance.

Correct

2. Fixed Income: HYG to outperform LQD through 1q11, at which point the HYG chart will turn-over.  High Yield spread widening could start a normalization in historically tight inter- & intra-asset class correlations, particularly as government intervention programs wane.

Correct

3. US Dollar: I expect longer-term bullish trends to unwind in an ugly 2011 if DXY fails short-term resistance @ 81.50.

Correct

4. Silver & Gold: While achieving its rally over a decade as opposed to Silver’s phenomenal few months, Gold has turned short-term bearish.  I’m leaving these alone, as they’re in technical no-man’s-land, especially Silver. I do, however note that Gold has already turned short-term bearish.

Correct (although that wasn’t a very bold call, I later punctuated it with this call for the precious metals collapse via parabola)

5. Emerging Markets: Bonds (EMB) have already slipped, Equities (EEM) are finally following them down in what should be a sharp correction.

Correct

I’ll have something similarly saucy ready for 2012.  For now, I’m going to soak-in a nice week off…

–Romeo

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