This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Global Risk Is On, For Now

But that's tomorrow. For now, Germany will cut the check to Greece so that they can pay German banks and exporters. Spain will, of course, happily resist any condition to OMT application for as long as the market does not push their debt yield over the pain threshold, as happened Friday. What crisis?

China Has Already Soft-landed, Really

Since I said in Time To Buy China, a few weeks ago, and then more recently in Big Changes are Coming to China, it is time to put money back into China. Signs of Chinese economic recovery and smart money returning to China continue to emerge.

Deutsche Bank is predicting faster growth, as reported by The Australian. Goldman Sachs China goes one step further and says outright that China has already soft-landed,, a financial news/weibo (Chinese tweet) web site.

It is also reassuring that the new leadership in Beijing appears not to be resorting to quick and easy fix of monetary stimulus, as the infamous four-trillion-yuan panic stimulus injected by the out-going Hu-Wen leadership, which has been mediocre in many ways and disastrous in others, in early 2009. Instead, they seem to focus more on gradual policy changes and deeper, structural reforms. The new outlook on China will no doubt change the outlook on world economy, at least for awhile.

Have no illusion. Problems and challenges facing China remain enormous. The stock market will remain scandal-laden for years to come. But shorting China, in light of the new background, has become much riskier.

Bullish week ahead

I don't want to read too much into last Friday's rally since the volume was very low, as expected. But the whole last week consistently showed signs of rebounding from the bottom of previous week. More reasons have emerged for this bullish trend to continue a bit more. Sector-wise, consumer product technology should benefit from the holiday sales, for example, Apple (AAPL - Get Report) and Amazon (AMZN - Get Report). Home building supplier and auto should have been benefiting from Sandy recovery efforts, for example, Home Depot (HD - Get Report), Ford (F - Get Report), GM (GM). News 12 reported that car dealerships in Long Island are reporting 30% or more surge in sales post-Sandy, and predicting shortage of used car inventory ahead (hundreds of thousands of cars in the tri-state areas have been totaled).

Gold (GLD) has been strongly correlated to the stock market since QE3 (with the notable exception of Nov. 6 to Nov. 8). In addition, gold should have the added boost from perceived improvements in eurozone and China, therefore better risk/reward prospect than stocks. It may re-test the $1,800 resistance this week and, if passed, the $1,900 all-time high.

Until the highly anticipated zombie apocalypse on Dec. 21, of course.

At the time of publication the author is long GLD.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
AAPL $124.43 0.00%
AMZN $372.10 0.00%
F $16.14 0.00%
GLD $113.66 0.00%
HD $113.61 0.00%


DOW 17,776.12 -200.19 -1.11%
S&P 500 2,067.89 -18.35 -0.88%
NASDAQ 4,900.8850 -46.5560 -0.94%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs