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January 5, 2010

BY Billy Fisher:

Contributor, Stock Traders Daily

Real Time Trading Reports:  Included are detailed trading reports designed to help investors realize opportunities in these companies.  The reports are linked to the stock symbols in the article below.

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(La Jolla, CA)  Traders are hoping that Monday is a sign of thing to come. Could the bullish activity that occurred, jumpstart the market and carry investors to another year of strong gains? It may be a little premature to make such predictions, but traders are already placing their bets.

The January Effect

After finishing the month of December virtually unchanged, the SPDR S&P 500 ETF (NYSE SPY) roared out of the blocks to the tune of a 1.7% gain on Monday. SPY, an ETF designed to track the performance of the S&P 500, took it on the chin with a 36.7% loss in 2008. However, in 2009 this fund bounced back and made up some its lost ground with a 26.3% gain.

According to Schaeffer’s Investment Research, when the S&P 500 has gained more than 1% on the first day of trading, the index has finished the year higher 86% of the time dating back to 1973. Monday’s advance could end up proving to be a good omen, but for that to happen the market will have to overcome obstacles in its path.

High unemployment, a shaky real estate market and indications that the FOMC could begin to raise interest rates in 2010 are just a few hurdles that will be in play. Traders who are looking to use this ETF to play the broader market trends can check out our free SPY trading report.

Commodity Rally Continues

One theme that persisted throughout much of 2009 was the futility of the dollar. As we race in 2010, it appears that little has changed on this front. On Monday, the PowerShares DB U.S. Dollar Index Bullish Fund (NYSE: UUP), which tracks the performance of the dollar, fell slightly from its Thursday’s close. Traders looking to take long or short positions on the fate of the dollar can benefit from our free UUP trading report.

Concerns about the dollar gave commodities another shot in the arm. The United States Oil Fund (NYSE: USO), which tracks the performance of crude, surged 2.5% as oil closed above $81 per barrel. The recent momentum of oil should continue to make this a closely watched commodity play in 2010. Traders looking to get in on the action should review our free USO trading report.

The gold rush continues to be as strong as ever. The SPDR Gold Shares ETF (NYSE: GLD) added 2.3% in gains on Monday. Silver was one of the biggest winners in the commodities space however. The iShares Silver Trust (NYSE: SLV) surged 4.2% as precious metals opened the year on another high note. Traders interested in engaging in the precious metals space are advised to check out our free GLD and free SLV trading reports.

We will continue to watch to see if the “January effect” holds up once again this year or if Monday’s trading action was just a false start. Stay tuned.

Looking for the best ETFs for 2010? Check out dynamic real-time trading reports published by Stock Traders Daily CEO, Tom Kee Jr., with a Free Trial.

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