Keystone's Key Events and Market Movers Week of 1/3/12

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Keystone presents the following underlying market currents, sometimes subtle, sometimes turbulent, that move global markets in real time.  The key dates and times below typically correspond to market pivot points.

Summary for the New Trading Week Ahead:

2012 trading begins tomorrow morning.  Perhaps traders will be crying like Baby New Year?  The New Year’s resolutions are already long forgotten promptly replaced with donuts, ciggy’s and ample couch-sitting time. Afterall, there is a whole 11 ½ months before any new faux resolutions are requested.

The U.S. markets continue to be at the mercy of the European debt crisis.  The January soap opera forming is the coming S&P downgrade of France debt.  When the France downgrade occurs in January, markets will focus on whether it is a one or two notch downgrade.  Two notches would mean big trouble for global equities markets. A Friday release is anticipated since S&P will force warn the France government and then also provide that weekend time for extra hours to address the situation. Watch 1/6/121 and 1/13/12, especially the latter.

Continue watching the Italy, Spain and France 10-year yields to gauge the creeping contagion. Use the 7% level for Italy—which is violated to the upside again.  Watch 6% for Spain and 3.3% level for France as signals of trouble. The France yield has now crept back above 3.1%.  The German, U.K., and U.S. 10-year yields show money seeking safety in these countries.

Continue to watch the asset relationship; euro higher=dollar lower=commodities higher=gold higher=U.S. equities higher=treasuries price lower and yields higher, or, the visa versa, euro down=dollar up=commodities down=gold down=U.S. equities down=treasuries price higher and yields lower.  As long as the 10-year yield stays under 2%, disinflation is a threat.

For the new trading year, Tuesday starts off with ISM Manufacturing Index and Construction Spending at 10 AM.  This data will serve as a potential market pivot point.  Watch the energy markets closely, XLE, the integrateds, and oil and gas companies.  Typically the energy markets tend to sell off after the ISM release.  Construction spending is an excellent indicator of employment.  FOMC Minutes at 2 PM will provide another market pivot point.

The Challenger Jobs Report is Wednesday morning. This kicks off the circus parade into the Friday morning Jobs Report. Strike up the calliope, the carnival is back in town. Factory Orders provide a potential market pivot area 10 AM Wednesday morning.  Thursday economic reports include ADP first thing in the morning, then Jobless Claims at 8:30 AM. Natty and Oil Inventories will occur mid-morning ; oil is delayed one day due to the holiday.  The Jobs Report Friday morning will provide high drama to set up the last day of trading for the first week of 2012.

Keystone’s Eclipse indicator targets this period, from now thru mid-January as having a high potential for a large market selloff.  A major Bradley turn date occurred last Wednesday, 12/28/11, so a window remains open this week for a major market trend change to occur. Sprinkle egg shells on the floor so you can walk softly thru these turbulent erratic markets.

Earnings are all but over as we enter the confessional season where companies will pre-announce any bad news, companies such as TXN and DD already lowering guidance.  Nonetheless, several companies release news on Thursday.  Q4 earnings season kicks off with AA on 1/10/12.

Key Dates and Times for the Week Ahead:

·         Monday, 1/2/12: U.S. equities markets are closed for the New Year holiday. Markets remain at the mercy of Europe news moving forward.  Watch for a potential S&P downgrade of France debt which will wreak havoc on equities markets.  Watch the 10-year yields for Europe nations as described above.  Keystone’s Eclipse Indicator identifies this period now thru the next three weeks, as having a high potential for a large market selloff. Markets remain under the influence of a major Bradley turn date on 12/28/11 so keep watching for a trend change in the markets this week. Earnings are now in the confessional season.

·         Tuesday, 1/3/12: 2012 trading begins at SPX 1258, same starting number as 2011. ISM Manufacturing Index and Construction Spending 10 AM. FOMC Minutes 2 PM.   Earnings:

·         Wednesday, 1/4/12:  Mortgage Purchase Applications 7 AM. Motor Vehicle Sales data. Challenger Job Report 7:30 AM kicks off the jobs circus into Friday.  Factory Orders 10 AM. Earnings: MOS.

·         Thursday, 1/5/12: ADP Employment Report 8:15 AM. Jobless Claims 8:30 AM. ISM Non-Mfg Index 10 AM.  Natty Inventories 10:30 AM. Oil Inventories 10:30 AM. Fed Balance Sheet and Money Supply 4:30 PM. Earnings:  APOL, STZ, FDO, MON, QXM, RT, XRTX,

·         Friday, 1/6/12: Monster Employment Index.  Jobs Report 8:30 AM.

Key Dates and Times for the Month Ahead:

·         In January: S&P will downgrade France debt—will it be one or two notches? Will the announcement occur on a Friday, perhaps 1/6/12 or 1/13/12?

·         Tuesday, 1/10/12: Q4 earnings begin with AA.

·         Thursday, 1/12/12: ECB Rate Decision and Press Conference—another quarter point cut or more aggressive?

·         Monday, 1/16/11: Markets are closed to observe the Dr. Martin Luther King Day holiday.

·         Friday, 1/20/12:  E.U. Summit; OpEx.

·         Monday, 1/23/12:  Congress returns so negativity will likely creep into markets.

·         Tuesday and Wednesday, 1/24/12 and 1/25/12:  FOMC Rate Decision and Press Conference

Major Market Movers for the Weeks, Months and Years Ahead:

·         Earnings

·         Corporate Bankruptcies

·         Options Expiration (OpEx)

·         Quantitative Easing (QE3)

·         FOMC (Federal Open Market Committee) Rate Decisions and Policy

·         Rating Agency Downgrades

·         U.S. Presidential Election

·         Congress In or Out of Session

·         Europe Debt Crisis

·         ECB (European Central Bank) Rate Decisions and Policy

·         Ongoing Wars

·         Continuing Geopolitical Events and Protests

·         Occupy Wall Street Global Protests

·         State and Muni Crisis; Union Busting

·         College/Student Debt Bubble

·         China Property Bubble and China Contagion

·         PBOC (Peoples Bank of China) Rate Decisions and Policy

·         China New Premier Selection

·         Emerging Market Rate Decisions and Policy/Trade Wars

·         BOJ (Bank of Japan) Rate Decisions and Policy

·         Government Secured Enterprises (GSE’s) Impact

·         Oil Economic Impact

·         Mother Nature/Crop Reports/Energy Wars/Water Wars

·         World Population

·         Keystone’s Eclipse Selloff Areas

·         Bradley Turn Dates

·         Solar Flares, Sunspots, New and Full Moons

Details for the Major Market Movers:

·         Earnings:  Q3 earnings are in line with lowered expectations and were generally more positive than most traders expected but much of the guidance is weak. ORCL was a disaster.  TXN and DD, and others, are now warning as the pre-announcement confessional season gets under way.  Q4 earnings season kicks off 1/10/12 with AA.

·         Corporate Bankruptcies: Keystone looks for a high number of company bankruptcies in 2012 and 2013. The politicians cannot make a difference; they only make the situation worse.  There is weak demand for products and services.  The deleveraging must continue and it will result in many companies going belly-up. This is a market negative over the intermediate and longer term.

·         Options Expiration (OpEx): Third Friday each month. Next is 1/20/12. Typically an up market move occurs from Tuesday thru Wednesday of OpEx week (1/17/12 to 1/18/12). Markets typically move opposite on the following Monday morning from the direction they closed on OpEx Friday.

·         Quantitative Easing (QE3):  Quantitative easing two (QE2) ended 6/30/11.  Tentative projection for QE3 announcement is January-March. Fed said that more quantitative easing is on the table on 10/20/11 and 10/21/11 which spiked the markets skyward. The Fed announced Operation Twist.  M2 money supply is increasing. Deflation must raise its ugly face before Bernanke is forced to announce QE3. Keystone’s Inflation Deflation Indicator is moving in and out of Disinflation.  Use the CRB as a general guide; under 300 is disinflationary; under 290 we are falling deeper into deflation; under 270 will probably prompt Bernanke to announce QE3.  A global quantitative easing program was initiated on 11/30/11 by the six largest central bankers; Fed, ECB, BOJ, BOE, SNB and Bank of Canada, but view the action as only a temporary liquidity bump to buy a short amount of time. Quantitative easing will bounce markets but any rally should peter out like QE1 and QE2; QE1 lasted 13 months and QE2 lasted 8 months.  QE3 future rally projection is 3 to 5 months?

·         FOMC (Federal Open Market Committee) Rate Decisions and Policy:  Next Meeting 1/24/12 and 1/25/12 with press conference.  Fed announced that the Zero Interest Rate Policy (ZIRP) will remain in place until mid-2013. Operation Twist is ongoing. Global intervention from 11/30/11 in progress.  QE3 announcement is anticipated for the January-February time frame. Deflation needs to occur first (watch the CRB as described above).

·         Rating Agency Downgrades: S&P downgraded U.S. debt from AAA to AA+ that accelerated the August 2011 crash.  Downgrade talk is a market negative and if any additional downgrade occurs for the U.S. from any of the three rating agencies, the equities markets will sell off large. The super committee failed at producing $1.2 trillion in cuts, so a U.S. downgrade has potential since the rating agencies actually wanted to see 3 to 4 trillion in cuts. S&P announced early December that they would not downgrade the U.S. again as yet. Continue to watch for European downgrades.  Portugal and Hungary are two recent downgrades. France and Germany were threatened with downgrades 12/5/11.  The consensus is that S&P will downgrade France in January, no one knows exactly what day (current targets are 1/6/12 or 1/13/12), or if the downgrade will be one or two notches.  A two notch downgrade would likely initiate a global equities market selloff.  Watch Italy, Spain, France and Germany 10-year yields to gauge the potential contagion and current mood of the ongoing European debt saga.

·         U.S. Presidential Election: The Third year of the Presidential Cycle should be strong for markets but last year proved to be an exception as Keystone forecasted.  2012 is now the Fourth Year of the Presidential Cycle.  Keystone will comment on the fourth year of the Presidential cycle with charts as time moves along so stay tuned. Perhaps a perfect storm exists for the rise of the independent candidate in 2012?

·         Congress In or Out of Session:  Market bullish when not in session, market bearish when in session. Congress is on break now until 1/23/12 thus, market bullish until the third week of January when the Congress will create market negativity again. The political bickering hurts the markets. Automatic budget cuts should occur in the future since the super committee could not agree to budget cuts. If Congress tries to walk back any cuts, this should result in a downgrade of debt and hurt equities markets.  Entitlement programs and tax reform must be modified to handle the debt proble but neither political party has the spine.  The American people complain, but none of them wants their existing entitlements decreased in any way, such as the 45 million Americans (1 in 8 citizens) that receive food stamps or the folks receiving lucrative corporate or union pensions while at the same time collecting Social Security benefits—to which they are entitled. Obviously, there is no easy solution—everyone needs to feel pain is the solution.

·         Europe Debt Crisis:  The Europe news flow is the main driver of the markets now.  The five little piggies (PIIGS) are Portugal, Ireland, Italy, Greece and Spain. Germany and France are in a difficult situation since they are the stronger economies and the potential exists for downgrades to their nations as the debt crisis is sorted out. The ECB 639 billion three-year loan program provides 1% loans and is providing short term relief for the crisis, kicking the can down the road, but, traders wonder why over 500 banks had to immediately access the program?  Merkel and Sarkozy, Merkozy, promise solutions but deadlines come and go.  For now, the three-year program is providing encouragement.  On Friday, 12/9/11, 26 of 27 Euro nations, sans U.K.  New governments are now forming in Greece and Italy.  Italy, Spain and France remain the major worries. Watch the 10-year yields closely to gauge contagion. Rating agencies have downgraded Italy, Spain, Portugal and Hungary’s debt.  Italy is the third largest debtor nation in the World, only trailing the U.S. and Japan.  Italy’s debts are now piling up quickly posing a major risk to the global economy. Italy faces more than $300 billion in refinancing in 2012. Italy has to repay 71 billion in debt in Q1 of 2012—within three months. Greece paper is probably worth 30 cents (the Merkozy plan targets a 50% haircut) on the dollar, Ireland 50 cents, Portugal 85 cents but no one knows for sure. The Spain and U.K. high unemployment for young people is a major concern, leading to riots.  Italy and Spain are too big to fail, too big to bail. Rich Uncle China may save the day with a fund for Europe but with the Chinese property bubble popping now, do not hold your breath, and the Chinese will worry about themselves, even though Europe is their biggest customer.   France downgrade is a major worry now and is set up as a January event; this could start a cascading market selloff so caution is warranted.   France and Germany elections occur in 2012 adding more chaos to the mix. Watch the asset relationship; weaker euro=stronger dollar=weaker commodities=weaker U.S. equities, and visa versa.

·         ECB European Central Bank) Rate Decisions and Policy:  ECB next rate decision meeting 1/12/12.  Past decisions are 25 bip cut on 12/8/11 and 11/3/11 (Draghi’s first and second meetings are cuts reversing Trichet’s previous actions); no hike 10/6/11; no hike 8/4/11; 25 bip hike 7/7/11; no hike 6/9/11; no hike 5/5/11; 25 bip hike on 4/7/11 that began Trichet’s mistake this year, just like July 2008 when he raised at the peak in the commodities market, exactly the wrong time.  The euro buoyancy in 2011 was caused by Trichet’s hawkish talk, now that is reversing with Draghi as Europe falls into recession.  Euro down=dollar up=equities down.

·         Ongoing Wars: Libya, Iraq and Afghanistan. Wars and M.E. problems will always provide a bid underneath oil, gold and silver.  As tensions ease, the premium in price works itself out, as tensions escalate, premiums increase.

·         Continuing Geopolitical Events and Protests: Iran, Egypt, Syria, Saudi Arabia, Bahrain, Yemen, N. Korea and Russia:  Dollar bullish and equity bearish.  Tensions provide a premium to oil, gold and silver prices with news flow immediately impacting prices, such as the Arab Spring this year. The Iran nuclear issue escalates each day. Iran military maneuvers in the Strait of Hormuz are receiving attention although it is all bluster.  Bahrain is a worry since unrest will impact oil supply.  Yemen is important since it is a southern Saudi border. The Arab nations are meeting to address the mayhem in Syria where thousands have been killed. Russia is experiencing the start of a revolt against the Putin regime by citizens over alleged election fraud.  Russia may have blocked Internet freedom to tamp down news of the riots by hijacking Twitter accounts and closing down web sites. Iran, Syria, Yemen and now Russia are the major concerns. Bad news=higher oil, gold and silver prices, or, visa versa.

·         Occupy Wall Street Global Protests: The protests began in New York on 9/17/11.  New York police evicted protestors from Zucotti Park in November.  Protestor numbers are dwindling as the winter winds blow and the warm indoors are far too tempting. Each U.S. city is evicting protestors. The movement has no impact on equities markets.

·         State and Muni Crisis; Union Busting:  Muni’s should experience pain first.  Muni’s rely on State funds.  The new State fiscal budgets are underway.  State funding of local municipality projects will be impacted.  Muni and State layoffs increasing. Colleges relied on State funds and tuition increases are already hitting cash-strapped students. Lingering unemployment lessens government tax inflows. U.S. will probably see an increase in the cash society since folks will find ways to avoid higher taxes, hurting government coffers rather than helping.  Interestingly, Kenneth Langone, cofounder of HD, commented on 11/3/11 that the trucking industry cannot find drivers to fill jobs since, despite the current high unemployment; many are producing more income using government assistance in combination with working ‘under-the-table’ just as Keystone has been writing about the last few months. Multiple U.S. cities now experiencing budget fights and protests.  Harrisburg, Pennsylvania, went bankrupt recently.  Now add Jefferson County, Alabama, home of Birmingham to the bankruptcy list.  Governments are trying to reduce the burden of high union costs. On 11/8/11, Ohio voted in favor of the unions (teachers, firefighters, police, etc…) and against the Republicans trying to reduce costs. This decision places a feather in the union caps all across America. Judge Mary France just ruled that Harrisburg is not allowed to seek bankruptcy protection, more than likely setting the table for taxpayers to pick up the tab once again in communities all across America as government overspending collapses a shaky system. Watch to see if California financial decisions spook the country. California is the same as Greece already. State and Muni problems are a 2012 story. MUB daily and weekly charts were in negative divergence marking September 2011 as a significant price top for muni’s. Muni’s tumbled as expected but have since recovered once again.  View these current highs as another significant high most likely the highs for weeks, months, perhaps years to come (price will move lower). Meredith Whitney was correct with her negative call on muni’s from Fall 2010 into early 2011, and even up to summer 2011. The muni bulls were correct during 2011.  From this current top now moving forward, muni’s appear to have nothing but downside ahead for 2012.

·         College/Student Debt Bubble: Students graduate with large debt and no job. Law students accumulate nearly 100K in loans and many remain jobless. Universities build lavish facilities that are unnecessary for education. One poll cited 80% of college graduates moving back home to live with parents.  Student loan defaults have doubled since 2005. Two-thirds of students have $24K or more debt.  No effect near term but in the months forward the loan defaults will develop into a big problem. Young folks have no productive outlet for their youthful energy so riots, even Black Friday holiday shopping mayhem, increase as frustration grows. Now that State funding is being lost to colleges, tuition hikes are occurring, students now have to pay even more for an education that no longer leads to a well-paying job. The high college debt coupled with no jobs is a double whammy for the young folks. On 11/4/11 in Keystone’s home city of Pittsburgh, Pennsylvania, Vice President Biden touted the Obama Administration’s plan to reduce the maximum annual payment on federal student loans from 15% to 10% of discretionary income.

·         China Property Bubble and China Contagion:  China property prices are topping out—the bubble is popping.  On 12/1/11, China PMI is under 50% indicating ongoing economic contraction. House prices continue to fall.  This is extremely negative on global markets causing contagion in Asia and elsewhere. Chinese factories are now going bankrupt. There are signs of growth slowing, bad real estate loans and fraudulent accounting by companies.  Copper was used as collateral for some construction loans and serves as a proxy for China.  65 million homes are unoccupied in China; a glut of capacity of epic proportions. Europe is China’s major customer so the Euro woes will only accelerate China’s problems.  China has built uninhabited cities, such as Ordos, to fuel their explosive growth during this century. China growth rates are trailing off, there are only so many empty cities that you can build.  China’s goal is to urbanize 400 million people to city life by 2030-that is in excess of the entire population of the U.S. China officials admit that 8% growth is needed to simply maintain ‘social cohesion’ so watch this number closely in 2012. Keystone agrees with Jim Chanos’ view on China. Watch the copper price to gauge China moving forward.  China bubble pops=global markets down.

·         PBOC (Peoples Bank of China) Rate Decisions and Policy:  We are now one year along from the first rate hike in China in October 2010. First hike 25 bps 10/19/10; second hike 25 bps Christmas 12/25/10; third hike 25 bps China New Years on 2/8/11; fourth hike 25 bps 4/5/11; fifth hike 25 bips 7/7/11.  China said in 2010 that it will project about five hikes into June 2011.  Hikes have occurred October, December, February, April and now July for the fifth and final raise.  China raised reserve requirements on 11/30/11, in concert with the global liquidity intervention, so this is the first firm acknowledgement of an easing direction now in place for China.  The question is when does the first rate cut occur? Five reserve requirement raises are projected for 2012, China will try to delay lowering rates but they may be backed into a corner quickly in 2012 having to cut rates.

·         China New Premier Selection:  The new 5-year leader is chosen in 2012 (at the same time as the U.S. president) so major currency decisions should be avoided until then.  Will it be a smooth transition?

·         Emerging Market Rate Decisions and Policy/Trade Wars:  India, Brazil, Taiwan, South Korea most important. Same effects as China rate hikes; commodities will sell off.  China, India and Brazil are most important to global markets. Each emerging country lowering rates here forward will escalate trade wars. Brazil is lowering rates. India has downgraded growth forecasts.  India finally stopped raising rates, the last major country to do so. Now Asian countries will slash each other’s throats to the down side. Chairman Bernanke’s hot easy QE2 money pumped up emerging markets and commodities from August 2010 thru May 2011 creating new asset bubbles. India is now experiencing civil unrest as citizens demonstrate against corruption at all levels of government.  India directly supports one-third of the global gold market.  Watch India as a proxy for gold price. China consumes 40% or more of the world’s copper production. Watch China as a proxy for copper price.

·         BOJ (Bank of Japan) Rate Decisions and Policy:  BOJ initiated a new round of currency intervention 10/31/11.  The intervention bounced the dollar/yen (weaker yen) from 76 to 79 with price hanging around 78.0 now.  Effects from the Japan tsunami and nuclear disaster are subsiding.  In December, Japan lowered growth projections moving forward. Japan is defending the 76.5 dollar/yen level.  In March 2011, the BOJ and G7 performed a coordinated intervention to weaken the yen, moving dollar/yen from 76 to over 85 in less than three weeks.  In August 2011, BOJ acted alone which bounced the dollar/yen from 76 to over 80 in three days, but price retreated quickly.  BOJ participated with other central banks on 8/15/11 to support Europe. Dollar/yen up=dollar up=euro down=commodities down=equities down.

·         Government-Secured Enterprises (GSE’s) Impact: 10/1/11 was a deadline to extend the GSE limit of $730K, which came and went, so the limits have reverted back down to $625.5K, with a possible review to raise the limit again in the weeks ahead.  This action hurts folks dancing on the fine line in that price range.  The GSE’s back 9 of every 10 mortgages. In general, for all folks, down payments of 25% to 30% are now required.  In essence, the demand will be reduced, thus, the market will tighten and house prices will continue lower moving forward. Keystone’s proprietary algorithm shows that housing has already fallen back into a double dip as of mid-May 2011. This is deflationary behavior giving Chairman Bernanke many sleepless nights. Keystone considers real estate to be a key investment over the next year or two but prices have much lower to fall first. Low rates do not help the housing recovery since folks do not have jobs. If they do have a job, they may not have a good credit score.  If they do have a good credit score, then they cannot come up with the 25% and higher down payments.  Perhaps the washout in housing will occur in 2012-2014, which should provide the ideal time to buy property, a generational-type low.

·         Oil Economic Impact:   Oil effects gasoline price which in turn affects retail sales. OPEC, the SPR (Strategic Oil reserve) and hurricane season effect oil price. SPR oil release is no longer an issue as oil price has moderated due to lower global demand. Hurricane season is over until June 2012.  Brent Oil and WTIC (West Texas) oil prices are important. With global demand for goods and services slowing, the intermediate and longer term view leans towards lower oil prices, but oil traders will be quick to refute this, the majority are looking for oil to continue drifting higher. Once the China downturn occurs in more force, oil should follow lower.  Middle East is always a concern since 17% of the world’s oil supply goes thru the Strait of Hormuz. Folks are uptight on worries of Iran war games in the Strait but Iran itself downplayed this news. Oil price moves with the equities markets; up oil=up markets and visa versa, oil down=equities down.

·         Mother Nature/Crop Reports/Commodity Wars/Energy Wars/Water Wars: Droughts (in Texas and the Southern States), storms, floods (in the Midwest and Thailand), earthquakes, tsunami’s (Japan), volcanic ash (northern Europe), hurricane’s (Gulf) and the like. Mother Nature had a huge impact on food inflation over the last year. Food and oil are the most affected. As the crop reports improve, the premium to price comes back out. The global need for food, energy and  fresh water supplies will create regional conflicts and affect markets in the long term.

·         World Population:  World population crossed 7 billion on 10/31/11. The obvious affect on the markets is the need for food to feed these 7 billion mouths. Ag commodities show promise in a long term time frame s well as agricultural farmland.

·         Eclipse Selloff Target Areas: Allow plus or minus a week or two on each side of the following dates as potential areas of major market selloffs; 5/15/11 (large sell off occurred May-June); 7/15/11 (large sell off occurred 7/8 thru 7/18 then the crash the week of 8/1/11); 11/3/11 (SPX dropped from 1278 to 1158, 9.4%, from 11/8/11 to 11/25/11); 1/3/12 (watch mid December thru mid January). Note how the May, July and November targets were all spot on.  This technique targets the next potential large market selloff area to occur from mid-December thru mid-January which also coincides with a major Bradley turn area.

·         Bradley Turn Dates: 12/28/11 (major turn area; window is from 12/21/11 thru 1/4/12, especially 12/23/11 thru 1/3/12); 1/11/12. Typically allow a +/- 7 day window with actual turns usually occurring in closer to the actual date, say +/- 3 day window. Markets more than likely change their trends, if headed up, they reverse down, or if they have been moving down in the previous days, they reverse up.  Every now and then, however, the markets will melt up or down in an acceleration move of the current trend. Dates are courtesy of Donald Bradley, Peter Eliades and Arch Crawford; reference their web sites for additional information.

·         Solar Flares, Sunspots, Full and New Moons: Not something to directly and solely trade off of but you must be aware of their influence. An M9.3-class solar flare at sunspot 1261 occurred on 8/4/11—at the same time the stock market waterfall crash commenced. Projections are for the flares to increase in the years ahead. Solar flare activity tends to coincide with market selling events.  There are studies on full moon and new moon effects that will tout both sides of the coin. In Keystone’s non-scientific studies, full moons tend to be in line with buying and new moons tend to be in line with selling, but only about a 60% to 65% correlation; a slight advantage over a coin flip. Full moon on 10/11/11 resulted in a buoyant week for the markets. New moon was 10/26/11 and 10/25/11 was a large down day although two large up days occurred directly after.  Full moon on 11/10/11 resulted in large up move 11/10/11 and 11/11/11 although 11/9/11 was a large down day. The new moon 11/25/11 shows selling before and into 11/25/11. The full moon 12/10/11 shows strong bullish markets occurring on 12/9/11.  The markets moved up into the new moon on 12/24/11 which goes against the expected outcome.  The next full moon is Monday, 1/9/12. The next new moon is 1/23/12.