Equity outlook for Jan 2010

Despite the fact that most investors (including myself) do not expect equities to perform as well this year as they did last year, there is still strength which showed the Dow breaking above the intermediate resistance level established in November ’09.

This also occured in the emerging markets indices.

Many traders (especially those who took profits in December) will be taking this opportunity to add back their positions as a result. 

An interest chart to observe is Japan, which roared back in December to test recent November highs. Those with a constructive view of Japan were presented with a golden opportunity in the last week of November, and will adding once this level gets broken.

I was asked whether or not this will be a good year to invest in equities, especially if you missed the bull run last year. My view is that although I prefer to buy when prices are low, it sometimes pays off to buy when prices are high especially when you are going with the trend BUT you have to be prepared to lose money if the market turns. This is the risk that one must balance when chasing rewards. I, for one am not selling any of my equities.