Looking back and looking ahead

It is the end of another trading year. A time of reflection on things past and pondering of what may come in the next year. I am reminded of one of the Market Wizards (from the book) who, when asked what was the secret to trading well, threw the chart book on the floor and got up on his desk to look down at the charts. Meaning that it is all about the big picture. Always look at the big picture. The same theme was one of chapters in "Reminiscences of a Stock Operator". The chapter where the protaganist Larry Livingstone tells of his conversion from a ticker trader to a big picture speculator, and says, "the big money is made in the big move", and relates his discovery that when he got the big picture right he knew he had the staying power to stay with his positions. Of course timing remained paramount. Putting on the trade at the right time is the key.
That said, lets look at the year past. I do that in the markets by looking at charts of prices of stocks and stock averages as well as the prices of commodities in their stock share equivalents. I started in the commodities and I believe that commodities are the nearest to a crystal ball that there can be to speculation in the broad markets in general.
Here is a chart of the S&P:

Bonds have been the safety trade. The long bond still looks to be going up, but I am looking for a top this coming year. This could be the trade of the year. (If I don't look too hard! LOL) Timing is the key, again.
TLT may break above recent highs early next year just to sucker in the last buyers. But then I expect it to reverse. Conversely, the stock market may have an early selloff just to catch the most on the wrong side.
The long bond:

And the "crystal ball"??? Here is some of what agriculture has been doing. As well as energy. Oil is near $100 a barrel again, without much fanfare. It wasn't that long ago that $100 oil was huge. Natural gas may keep a lid on energy prices though, and this will be good for the stock markets and the economy in general. Cheap energy allows the rapid consumption of everything else!! Remember the 1990's?
The charts:

I chose Noble Energy to represent oil. The trend is up in this one.
And Agriculture is looking to turn around. Food prices drive inflation, as does oil.... The early stages of inflation are good for the stock markets.



And the green looks good! John Deere green. I should write a song! DOH!

I'm kind partial to Deere.

And for the investors the Russell small caps have lagged, but I think they will catch up fast if the stock indexes go higher.
IWM:

The charts show what the market is looking for and which ways the economys of the world are trending. Some things that may try to derail the recovery are Iran and its ambitions and the threat of war. And how Europe resolves it's debt problems. I made a reference to the 1990's in one of those charts. The 1990's were a decade of problems around the world. There were several currency crises in that period and their problems proved to be our gain. Their economys slowed and we profited from the lower inflation. Low inflation gives banks a good incentive to lend and lending is the way money is printed. I think the US Dollar will resume it's downtrend.
But in the final analysis I trade. It doesn't matter what the markets do. It is much easier to make money in a bull market however. And everybody is generally happier. And I wish everybody a very Happy New Year!!


Markets just closed today..... Year to date gain only 8.4%. A tough year.