Weekly Risk Report 12/22/2008
As the year is winding down, it appears that there's less and less hardcore selling going on. The market averages again last week were only slightly different Friday over Friday. Again this week we see three of the four i-Wave components rising slightly in risk profile, but they remain at historically very low risk thresholds. The Zeal component is neutral but is demonstrating the very low level of IPO activity.
The New Year will bring in a change of executive administration to our nation's capital along with a number of new senators and representatives. That is going to be the main topic of discussion for the first part of January. On the business channels there will be lots of talk about Year Over Year results. Those talks will lead to prognostication about 2009's prospects. SignalPoint will continue to watch the markets closely for signs of strength and recovery. With unprecedented low risk being measured by our i-Wave we can assume only that the downside risk is now limited. Attempting to gauge the upside potential is difficult at best.
If we assume a reversion to mean for the various components of our i-Wave, there is an indication that Speculation will start to come back to the markets. Divergent opinion about the markets' direction should start to build and Relative Valuation can withstand a large increase in either interest rates or Price/Earnings with no immediate problems. It would appear that we will continue to see very low levels of Initial Public Offerings as there's no incentive for private companies to "go public" right now.
Please have a safe and fun filled holiday.
