StreetSmartPost

Tuesday, January 9, 2012. 9.25 a.m.

The widespread concerns that the market’s impressive rally from its October low might be stopped by the potential important resistance at the 200-day m.a. is looking increasingly unlikely.

The concerns are understandable. Another failure at the 200-day m.a. could mean the summer correction, in which the S&P 500 plunged 20%, was the first leg down of a new bear market, and the rally off the October low is just a bear market rally.

As I’ve been showing you, the Dow broke through the resistance and closed at successive new rally highs, and is now 443 points, or 3.7% above the m.a., probably enough to consider a break out.

But the S&P 500 and Nasdaq have been lagging.

However, it is looking increasingly like they may well follow the Dow and indicate that the three-year bull market from the March, 2009 bottom remains intact.

Eurozone Tensions Easing?

I’ve been saying since our buy signal in October “if only we could ignore Europe”.

On top of everything else (the market’s upside reversal in October, the increasing momentum of the U.S. economic recovery, etc.) is that actually beginning to happen, that the Eurozone crisis will fade into the background some, as it has repeatedly done over the last two years, allowing the bull market from 2009 to continue?

The Dow Jones Newswire carried an interesting item late yesterday ‘Credit Tensions Seen On The Wane in Europe’.

Some of its points:

“Eurodollar futures contracts settled broadly higher in a relatively quiet trading session, a sign that investors see lower odds for an abrupt freeze-up in lending among European banks.”

“You’re seeing a general trend toward easing of credit pressures in the New Year,” said Nick Kalivas of Hadrian Partners Ltd., a New York research firm.”

“A more positive tone has come over the sector in recent weeks, with participants noting improved conditions in swap markets and rising stock indexes, indicative of investors’ willingness to put more money at risk, as European Union officials work to contain fiscal problems, and economic conditions show signs of improving in the U.S.”

A Big Thank-you to:

Dan Sullivan, editor of The Chartist; Joseph Shaefer, Chief Investment Officer of Stanford Wealth Management and editor of Investors Edge; and Dave Robinson, editor of The Bull & Bear Financial Report, for coverage and recognition of our work and opinions.

And a very special thank you to subscribers for all the Christmas cards and thank-you letters. They were much appreciated. 

To read my weekend newspaper column ‘Can The U.S. Economic Recovery Overcome Europe’s Drag? Click here.

Subscribers to Street Smart Report: In addition to the charts and updates in the ‘premium content’ area of this blog this morning, there is an in-depth signals and recommendations report on ‘Gold, Bonds, Dollar, Inflation’ in the subscribers’ area of the Street Smart Report website from Thursday, and on the U.S. Market from Wednesday. The next issue of the newsletter will be out tomorrow.

Yesterday in the U.S. Market.

The market closed positive again, but with only a fractional move. The Dow traded in a total range from its intraday low to its intraday high of just 76 points and closed in the middle of that range, up 32 points, or 0.3%, almost but not quite another new rally high. Volume remained light, with just over 0.7 billion shares traded on the NYSE.

The Dow closed up 32 points, or 0.3%. The S&P 500 closed up 0.2%. The NYSE Composite closed up 0.4%. The Nasdaq closed up 0.1%. The Nasdaq 100 closed down 0.2%. The Russell 2000 closed up 0.5%. The DJ Transportation Avg. closed up 0.6%. The DJ Utilities Avg closed up 0.3%.

Gold closed down $6 an ounce at $1,608 an ounce, hanging on above $1,600.

Oil closed down $0.17 a barrel at $101.39 a barrel.

The U.S. dollar etf UUP closed down 0.4%.

The U.S. Treasury bond etf TLT closed down 0.2%.

Yesterday in European Markets.

Markets in Europe closed mixed yesterday. The London FTSE closed down 0.7%. The German DAX closed down 0.7%. France closed up 0.3%.

Asian Markets Surged Up Last Night.

The DJ Asia-Pacific Index closed up 1.2%.

Among individual markets last night:

Australia closed up 1.1%. China closed up 2.7%. Hong Kong closed up 0.7%. India closed up 2.2%. Indonesia closed up 1.3%. Japan closed up 0.4%. Malaysia closed up 0.61. South Korea closed up 1.5%. Singapore closed up 1.1%. Taiwan closed up 1.2%. Thailand closed up 0.8%.

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In the premium content area today: Gold.

Markets This Morning.

European markets are up strongly this morning. The London FTSE is up 1.5%. Germany’s DAX is up 1.9%. France’s CAC is up 2.6%

Oil is up $1.71 a barrel at $103.02.

Gold is surging up $27 an ounce at $1,635 an ounce.

This morning in the U.S. Market:

This is a very light week for potential market-moving economic reports, but they include the Small Business Confidence Index, the Fed’s Beige Book, Retail Sales, etc. To see the full list click here, and look at the left side of the page it takes you to.

There were no important economic reports yesterday.

Today’s only report is that the Small Business Confidence Index was up again in December, rising 1.8 points to 93.8, its 4th straight month of improvement.

The 4th quarter earnings reporting period has arrived, with Alcoa, the first Dow stock to report, reporting after the close yesterday that its 4th quarter earnings of 24 cents a share last year reversed to a loss of 18 cents a share in the 4th quarter this year. But it wasn’t a surprise and the stock is up 2.5% in pre-open trading on the company’s upbeat forecast for this year.

The surging markets in Asia last night, and Europe this morning, are leading the U.S. market higher this morning.

Our Pre-Open Indicators:

Our pre-open indicators are pointing to the Dow being up 120 points or so in the early going.

To read my weekend newspaper column ‘Can The U.S. Economic Recovery Overcome Europe’s Drag? Click here.

Subscribers to Street Smart Report: In addition to the charts and updates in the ‘premium content’ area of this blog this morning, there is an in-depth signals and recommendations report on ‘Gold, Bonds, Dollar, Inflation’ in the subscribers’ area of the Street Smart Report website from Thursday, and on the U.S. Market from Wednesday. The next issue of the newsletter will be out tomorrow.

How are you doing? We can help, and at very reasonable cost! Street Smart Report Online provides an 8-page newsletter every 3 weeks, an in-depth 6 page interim update every Wednesday on our intermediate-term signals and recommended holdings, an in-depth 4-page ‘Gold, Bonds, Dollar’ update every 2 weeks, and special reports and hotline updates as needed. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 23nd year. As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

I’ll be back Thursday morning with the regular Thursday morning post, around 9":25 a.m. (This blog appears every Tuesday, Thursday, and Saturday morning!).

**** End of Today’s post*****

Saturday, January 7. 11:00 a.m.

The U.S. stock market ended last year on a positive note, and began the new year with the S&P 500 up 1.6% for the week. The market made a new high for the rally from the October low this week. The Dow is now up 1,700 points, or 16% from that intermediate-term low.

The Nasdaq has joined the DJIA, DJ Transportation Avg., and S&P 500 in breaking tentatively above the important potential resistance at the 200-day moving average, albeit only fractionally.

The bull market that began in March 2009 has climbed a typical ‘wall of worry’ over the last three years, battling through substantial threats of relapse back into the ‘Great Recession’, that massive amounts of liquidity flooded into the financial system would create runaway inflation, more than two years of the eurozone debt crisis periodically being on the brink of bringing disaster, two scary slowdowns in the U.S. economic recovery, two near drops into bear market territory by the stock market, and so on.

But here it is with the S&P 500 up 88% from that early 2009 low, the Nasdaq up 106%.

Meanwhile, the U.S. economy continues to show impressive growth recovery after the first half slowdown, right up to the latest report, yesterday’s employment report.

What’s not to like about that?

Normally by now, three years into an impressive bull market, investor sentiment would be extremely bullish, approaching the euphoria and confidence usually seen near rally tops.

And it is getting there.

Sentiment readings:

The VIX Index (aka the Fear Index).

The VIX Index measures the sentiment of options players.

Fear is usually low (bullishness high) at rally tops as marked by the vertical red lines in the chart.

The VIX then begins to rise as a subsequent correction gets underway and continues to rise so that fear or bearishness is then high (at or above the horizontal blue line at about 32 on the VIX) by the time the correction bottoms.

The VIX Index reached a level of very low fear last spring and summer (the far right red line) while the previous year’s rally was still underway.

But then when the market topped out at the end of April, fear and bearishness began to rise after the summer correction had been underway for a couple of months, so that fear or bearishness was at a high level in October when the correction bottomed.

Fear has now been declining (bullishness rising) with the new rally that began at the October 3 bottom.

It has further to fall if it is again cycling toward the low level of fear usually seen at rally and market tops, supporting the thought that the rally has further to go.

AAII Poll:

The weekly poll of its members by the American Association of Individual Investors provides another quite consistent measurement of investor sentiment.

It usually reaches a level of 55% bullish or higher, and bearishness 20% or lower at rally or market tops.  

It made a big jump toward, and even into those levels this week, with bullishness jumping 8.3 to 48.9%, and bearishness plunging a big 13.7 to only 17.2%.

We’d have to consider those readings, particularly the low bearish reading, in the danger zone where we need to watch our technical indicators closely.

So a bit of a mixed picture between the VIX not yet in its low fear zone, but at least the bearish portion of the AAII poll being in its risk zone.

An Oddity in the Eurozone Debt Crisis Fears.

The U.S. financial media is increasingly obsessed with the eurozone debt crisis.

But the European media seems to be less so, with the eurozone dominating headlines seeming to have peaked a month ago.

Similarly, as a glance at the table below of weekly global market performances shows, the return of eurozone worries seems to be more pronounced in the U.S. market, much less so in the large European markets, which have been up for three straight weeks. Yet they are closer to the problem and will obviously suffer the most if the eurozone crisis is not contained.

To read my weekend newspaper column ‘Can The U.S. Economic Recovery Overcome Europe’s Drag? Click here.

Subscribers to Street Smart Report: In addition to the charts and updates in the ‘premium content’ area of this blog this morning, there is an in-depth signals and recommendations report on ‘Gold, Bonds, Dollar, Inflation’ in the subscribers’ area of the Street Smart Report website from Thursday, and on the U.S. Market from Wednesday. The next issue of the newsletter will be out on Wednesday.

Yesterday in the U.S. Market.

A mixed day going into the long weekend, but disappointing in the way the market paid more attention to the negative news from Europe than the upside surprise in the U.S. jobs report.

The Dow closed down 0.4%. The S&P 500 closed down 0.4%. The NYSE Composite closed down 0.6%. The Nasdaq closed up 0.2%. The Nasdaq 100 closed up 0.3%. The Russell 2000 closed down 0.3%. The DJ Transportation Avg. closed down 0.1%. The DJ Utilities Avg closed down 0.6%.

Gold closed down $2.20 an ounce at $1,617, but up $10 for the week.

Oil closed up $0.11 a barrel at $101.92

The U.S. dollar etf UUP closed up 0.3%.

The U.S. Treasury bond etf TLT closed up 0.8%.

Yesterday in European Markets.

European markets closed mixed yesterday. The London FTSE closed up 0.5%. The German DAX closed down 0.6%. And France’s CAC closed down 0.2%.

Global markets for the week.

A mostly positive week. Once again the European markets, which are much closer to the eurozone crisis, seemed to be less concerned about it than the U.S. market and media. You’d think it would be the other way around. If its threat materializes they will take the worst of it.

Premium Content Area.

For Street Smart Report subscribers only, used to provide additional info to that provided in the newsletter, mid-week reports, and hotlines.

To obtain access please click on the ‘Subscribe’ link. It will take you to an information page on subscribing to Street Smart Report, a subscription to which includes access to the premium content area of this Street Smart Post blog.

Next week’s Economic Reports:

Next week will be a very light week for potential market-moving economic reports, but they will include the Small Business Confidence Index, the Fed’s Beige Book, Retail Sales, etc. To see the full list click here, and look at the left side of the page it takes you to.

To read my weekend newspaper column ‘Can The U.S. Economic Recovery Overcome Europe’s Drag? Click here.

Subscribers to Street Smart Report: In addition to the charts and updates in the ‘premium content’ area of this blog this morning, there is an in-depth signals and recommendations report on ‘Gold, Bonds, Dollar, Inflation’ in the subscribers’ area of the Street Smart Report website. from Thursday, and on the U.S. Market from Wednesday. The next issue of the newsletter will be out on Wednesday.

I’ll be back with the next regular blog post on Tuesday morning at 9:25 a.m.

Non-subscribers: How are you doing? We can help, and at very reasonable cost! Market, sector, stock, gold, bond, and dollar buy and sell signals, short-sales, long-side and ‘inverse’ etf’s, mutual funds, two portfolios of recommended holdings (one modified buy and hold, and one market-timing). Street Smart Report Online provides an 8-page newsletter every 3 weeks, an in-depth 6 page interim update every Wednesday on our intermediate-term signals and recommended holdings, an in-depth 4-page ‘Gold, Bonds, Dollar’ update every 2 weeks, and special reports and hotline updates as needed. Highly regarded and in our 24th year. As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

This blog appears every Tuesday, Thursday, and Saturday morning!

**** End of Today’s post*****

Thursday, January 5, 2012. 9.25 a.m.

There have been still more economic reports this week indicating the economic recovery in the U.S. is gaining momentum.

They include that Factory Orders rose 1.8% in November, which no doubt contributed to the report that the ISM Mfg Index rose again in December, to 53.9, its highest level in six months. Within the ISM report, new orders also rose in December, which had companies boosting production and employment.

That no doubt contributed to this morning’s ADP employment report, which was that 325,000 new jobs were created in the private sector in December, much better than economists’ forecasts.

And the Labor Department reported that new unemployment claims fell by 15,000 last week to 372,000. New weekly unemployment claims have been fewer than 400,000 in eight of the last nine weeks. Analysts believe that when claims remain consistently below 400,000 it signals a meaningful turnaround in the important employment picture. The more important four-week moving average of new claims, which smooths out the week to week volatility declined last week to 373,250, the lowest level in more than three years.

Not that all is well. Far from it. Unemployment remains too high. There are far too many people who have given up looking for a job and dropped out of the labor market, and too many people with part-time jobs that would like full-time jobs.

But that’s the view through the rear window. Looking ahead, has the pendulum begun to swing in the opposite direction?

Has the Housing Industry Also Bottomed?

The sentiment of national home-builders has been very pessimistic for four years, but has been slowly improving over the last four months as home sales have been rising.

It was reported this week that Construction Spending was up again in November, the third monthly increase in four months, rising 1.2% versus the consensus forecast of economists of only a 0.5% gain. Near record low mortgage rates and recent gains in home sales are encouraging home-builders and helping the construction industry to show signs of recovering from the recession. Private construction spending is at its highest level in more than two years. That’s still not saying much since it’s still in a deep hole. But recovery has to begin from some level, and the four-month trend reversal is encouraging.

The housing industry is still facing the threatening overhang of foreclosed properties yet to come on the market. For several years now gloom and doomers have expected an avalanche of those foreclosed properties to hit the struggling housing market any day and send the economy off a cliff.

But so far, by accident or design, the banks have foreclosed on properties very slowly, leaving home-owners living in homes sometimes for well more than a year without making payments, before foreclosing. And then they have only slowly put the foreclosed homes on the market, feeding them in approximately at a rate the market can absorb, avoiding the doom and gloom disaster many have forecast.

If employment, the economy, and home sales continue to pick up, they may yet fool everyone by being able to increase the pace of foreclosing but still continue the process of only feeding them into the market at a pace the market can absorb, until the problem mostly goes away. Wishful thinking? Perhaps, but it’s a strategy they’ve been successfully following for four years now, since the housing bubble and sub-prime mortgage situations burst in 2007.

And yesterday, the Federal Reserve said it may push financial sector supervisors to allow banks, and mortgage giants Fannie Mae and Freddie Mac, to rent out the foreclosed homes they have on their books. If the lenders had people in the homes maintaining them instead of having them abandoned and deteriorating, and were also receiving rental income, they might be able to stretch out the process of only slowly throwing those houses on the market even further.

But All Is Not Well.

I don’t want to be misleading with my optimism since our October buy signal.

The continuing improvement in U.S. economic reports encourage expectation that the economy is still on the mend since the ‘Great Recession’ ended in June, 2009, and that the slowdowns in the first half of 2010, and again in the first half of last year, were only temporary pauses in the recovery.

But while the continuing recovery since 2009 seems on course, it is still anemic, still not producing jobs fast enough, still not moving enough existing homes out of the unsold inventory to produce a strong economy, still not strong enough to encourage corporations to stop hoarding cash and start expanding again, still not on sure enough footing to encourage banks to lend in confidence that the loans will be paid back and not become more bad debts on their books down the road.

There was horrendous damage done in the Great Recession of 2007-2009, and the economy cannot bounce back from that much damage as fast as from previous recessions. It will take more time, and involve more hiccups along the way.

Our strategy continues to be to go after intermediate-term rallies and corrections, which usually last three to six months or so, but sometimes continue on into the longer-term, while not worrying so much about the ‘big picture’ long-term theories and forecasts.

Regarding the longer-term, there are of course the record federal budget deficits, and U.S. debt, which will have to be taken care of some time down the road, perhaps painfully for the economy. and the eurozone debt crisis hangs over all.

And even now, many global markets remain in bear markets, and the U.S. market is struggling in the vicinity of the potential resistance at 200-day moving averages.

To read my weekend newspaper column ‘2011 – A Year of Odd Global Market Divergences! Click here.

Subscribers to Street Smart Report: In addition to the charts and signals in the premium content area of this morning’s blog, there is an in-depth signals, outlook, and recommendations update on the U.S. market in the subscribers’ area of the Street Smart Report website from yesterday, and there will be a similar in-depth update on ‘Gold, Bonds, the U.S. Dollar, and Inflation’ there later today.

Yesterday in the U.S. Market.

The market closed mixed and basically flat yesterday, no follow-through to the previous day’s big rally, but no give back either. Volume, like Tuesday’s, was roughly 0.8 billion shares traded on the NYSE, almost double last week’s extreme low volume holiday week, but still light volume.

The Dow closed up 21 points, or 0.2%, at another new rally high. The S&P 500 closed unchanged. The NYSE Composite closed down 0.2%. The Nasdaq closed unchanged. The Nasdaq 100 closed up 0.3%. The Russell 2000 closed down 0.7%. The DJ Transportation Avg. closed up 0.3%. The DJ Utilities Avg closed down 0.6%.

Gold closed up $12 an ounce at $1,613 an ounce, back above $1,600 again.

Oil closed up $0.30 a barrel at $103.26 a barrel.

The U.S. dollar etf UUP closed up 0.6%.

The U.S. Treasury bond etf TLT closed down 1.2%, continuing to lose its safe haven appeal.

Yesterday in European Markets.

Markets in Europe closed down yesterday, giving back some of their impressive spike-up the first trading day of the new year. The London FTSE closed down 0.6%. The German DAX closed down 0.9%. France closed down 1.6%.

Asian Markets Closed Mixed Last Night.

The DJ Asia-Pacific Index closed down 0.6%.

Among individual markets last night:

Australia closed down 1.0%. China closed down 1.5%. Hong Kong closed up 0.5%. India closed down 0.2%. Indonesia closed down 0.1%. Japan closed down 0.8%. Malaysia closed up 0.6%. New Zealand closed down 0.1%. South Korea closed down 0.1%. Singapore closed up 0.1%. Taiwan closed up 0.7%. Thailand closed up 0.1%.

Premium Content Area. For Street Smart Report subscribers only, used to provide additional info to that provided in newsletter, mid-week reports, and hotlines.

To obtain access click on the ‘Subscribe’ link below which will take you to an information page on subscribing to Street Smart Report.

Markets This Morning.

European markets are down this morning. The London FTSE is down 0.5%. Germany’s DAX is up 0.1%. France’s CAC is down 1.1%

Oil is down $0.26 a barrel at $102.96.

Gold is down $3 an ounce at $1,609 an ounce.

This morning in the U.S. Market:

This is an important holiday-shortened week for potential market-moving economic reports, including the ISM Mfg Index, Construction Spending, and Factory Orders, and culminating tomorrow with The Big One!, the Labor Department’s Monthly Employment Report for December. To see the full list click here, and look at the left side of the page it takes you to.

Tuesday’s reports were that the ISM Mfg Index rose again in December, to 53.9, its highest level since June. Within the report, new orders also rose in December, which had companies boosting production and employment. And Construction Spending was up again in November, the third monthly increase in four months, rising 1.2% versus the consensus forecast of economists of only a 0.5% gain.

Yesterday’s reports were that weekly chain-store sales were up 5.3% in the week ended Dec. 31 from the same week a year ago, the biggest weekly improvement in 18 months. And that Factory Orders rose 1.8% in November. Auto sales were released with Ford reporting its sales were up 17% in 2011. Chrysler reported its sales jumped 37% in December, and 26% for the year. General Motors reported its sales increased 5% in December and were up 14% for the year.

This morning’s reports were that new weekly unemployment claims fell 15,000 last week to 372,000. The big report of the day was the ADP Employment Report which showed was that 325,000 new jobs were created in December, much better than economists’ forecasts.

Still to come is the ISM Non-Mfg Index (the services sector), which will be released at 10 a.m.

Oddly, the surprisingly positive ADP jobs report has not had a positive effect on our pre-open indicators.

Our Pre-Open Indicators:

Our pre-open indicators are pointing to the Dow being down 40 points or so in the early going.

To read my weekend newspaper column ‘2011 – A Year of Odd Global Market Divergences! Click here.

Subscribers to Street Smart Report: In addition to the charts and signals in the premium content area of this morning’s blog, there is an in-depth signals, outlook, and recommendations update on the U.S. market in the subscribers’ area of the Street Smart Report website from yesterday, and there will be a similar in-depth update on ‘Gold, Bonds, the U.S. Dollar, and Inflation’ there later today.

How are you doing? We can help, and at very reasonable cost! Street Smart Report Online provides an 8-page newsletter every 3 weeks, an in-depth 6 page interim update every Wednesday on our intermediate-term signals and recommended holdings, an in-depth 4-page ‘Gold, Bonds, Dollar’ update every 2 weeks, and special reports and hotline updates as needed. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 23nd year. As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

I’ll be back Saturday morning with the regular Saturday morning post, as usual later than the week-day posts, probably around 11 a.m. (This blog appears every Tuesday, Thursday, and Saturday morning!).

**** End of Today’s post*****

Tuesday, January 3, 2012. 9.25 a.m.

As I noted on Saturday’s blog, and weekend media replays of last year highlighted, last year was a difficult year for most investors, not only individual investors, but many professionals, including hedge funds, and famous names. Even Warren Buffett was down 24% at the October low, and ended the year still down 6%.

The volatility was brutal, day-to-day, week-to-week, and month-to-month. The unfavorable season correction had the S&P 500 down 20.1% at its October 3 low, on the edge of an official bear market. Many global markets, including Brazil, China, India, Hong Kong, etc. were in serious bear markets, down as much as 35% at their lows.

The prognostications for this year were (and still mostly are) scary; that the eurozone debt crisis will implode with defaults by Greece, Italy, and possibly Spain in the first quarter, resulting in massive bank failures and a recession in Europe that will drag the rest of the world, including the U.S., into a global recession, and the U.S. market into a bear market.

But the stock market, which is usually a better economic forecaster than any of the tools of economists, seems to be saying otherwise.

While economists use their favorite forecasting method (extending whatever has been the recent trend in a straight line into the future), global markets reversed off their lows even as the news worsened. The U.S. market reached it low for the year October 3, and has been in a rally since that has the Dow up 15% from that low, and closed it up 5.5% for the year.

And while one or two days is meaningless, markets have been positive to begin the new year, markets in Europe up yesterday, and again today, and Asian markets up last night in their first session of the new year. And futures this morning are pointing to the Dow being up 180 points or so, at least in the early going.

It will probably continue to pay off to let the market be the economic forecaster in 2012, to let the charts and technical indicators reveal the direction of money flows, support/resistance levels, etc., and warn of potential momentum reversals before they take place.

Another Industry Showing Signs of Recovery?

It’s been encouraging to see some signs that the housing industry, auto industry, manufacturing, consumer confidence, etc., have potentially bottomed.

But the big worry has remained, that banks are still on the ropes, under-capitalized, burdened with debt, new regulations cutting into their previous ability to make big profits from proprietary trading, and so on.

There were 140 bank failures in 2009, and 157 in 2010. Economists have been forecasting the numbers would continue to grow for two or three more years (again extending the recent trend into the future, thinking endless trends rather than cycles).

But what’s this? There were only 92 failures in 2011. The last two failures were the first in almost a month. Have the problems in the banking industry also potentially bottomed?

To read my weekend newspaper column ‘2011 – A Year of Odd Global Market Divergences! Click here.

Subscribers to Street Smart Report: In addition to the charts and signals in the premium content area of this morning’s blog, there will be an in-depth updates, signals, and outlook update on the U.S. market tomorrow in the subscribers’ area of the Street Smart Report website.

Yesterday in European Markets.

European markets closed up yesterday to start off the new year.

Asian Markets Closed Up Last Night.

The DJ Asia-Pacific Index closed up 1.3%.

Some Asian markets, including Japan and China were closed for holidays.

Among individual markets that were open last night:

Australia closed up 1.1%. Hong Kong closed up 2.4%. India closed up 2.7%. Indonesia closed up 1.3%. New Zealand closed up 0.9%. South Korea closed up 2.7%. Thailand closed up 0.1%.

Premium Content Area. For Street Smart Report subscribers only, used to provide additional info to that provided in newsletter, mid-week reports, and hotlines.

To obtain access click on the ‘Subscribe’ link below which will take you to an information page on subscribing to Street Smart Report.