A Trader’s Outlook

Yesterday was an interesting day to say the least.
The major indices gapped higher at the open after Congress and the
president reached a compromise that would allow an extension of tax cuts
and jobless benefits. And while I contend this was the right move, it’s
hard to see it as a major catalyst for stock prices.

Sure enough, stocks sold off steadily most of the
day. And the S&P 500 closed slightly below important
support/resistance at 1,225.

$50 Silver?

A story by Robert Lenzner in Forbes Magazine today outlined the potential
for silver to go as high as $50 an ounce in the near future.

With silver on the march from year to date lows of just over $15 an ounce
all the way up to recent highs of over $30 an ounce, it’s been one of the
best performing asset classes of the past year – and even the past
decade.

How to Profit from BP’s Next Oil Field

Ever since the Gulf of
Mexico
oil spill, BP has been very quiet
about where it is drilling for oil. But the announcement that BP is
raising cash by selling its stake Pan American Energy for $7 billion
means that the damaged company is ready to start developing new oil
fields.

This time, however, BP will not be drilling in
deepwater. Instead, BP plans to produce 60,000 barrels a day from its
partnership in a land-based Canadian oil field.

New technology has led to a renaissance of North
American oil production. One such oil rich area stretches from

Wyoming, through
North Dakota and
into
Canada.
Known as the
Williston Basin, this geological formation
includes the Bakken Oil Pool, which has at least 5 billion barrels of
reserves.

Bank of Ireland’s New Shareholder: You?

The Bank of Ireland is about to have a new majority shareholder. Ireland’s
government is expected to raise its stake in the Bank of Ireland from 36%
to something constituting a majority.

The Irish government is also expected to raise its stake in Allied Irish
Bank to, potentially, 99%.

If this sounds like Ireland is taking a page from the U.S. bank bailout
strategy you’re right. When you’re facing the potential of a run on the
banking system, the government is essentially the last entity that can to
step in and provide a backstop.

The Market Feels Heavy

The good vibes from the GM IPO and the bailout
potential for
Ireland took the S&P 500 back above support/resistance at 1,192.
We’ll see how long the good vibes last.

Despite yesterday’s strong move, the stock market
still feels “heavy” to me. That’s not to say I think a big decline is
imminent. But the way higher is going to be a slow grind, unless we get
some data to sway the mood.

Stocks for Holiday Shopping

I want to start this week by returning to my
comments from Friday. You’ll recall I discussed a few events that might
sap the bullish momentum from this rally and send stock prices lower. I
mentioned inflation, oil prices and debt at the state level as potential
speed bumps.

I’m sure we could come up with a few other bearish
stories to keep an eye on. But the point is, while we should always be
aware of threats to prevailing market sentiment, it is not time to get
positioned for them.