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Note: I am reposting my “market predictions” from the recent iBC piece we .pdf’d because I want to be able to keep track of some of these picks I’ve mentioned, especially the natural gas and water choices… For my non-market prediction you will have to refer back to the original document.
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In the year 2010, much CHANGE will come unto the land, and we HOPE it’s change we can believe in (for a change).
Markets Wise, here are my 2010 predictions:
Reversing the traditional “January Effect,” the market will pull back some 7 to 14% in the next month, with the techs leading the way and taking the rest of the market with them once they break down — much like the [[QQQQ]] took the rest of the market up on the recent breakout.
The [[SPY]] and [[IWM]] (Russell 2K) will follow soon thereafter, along with good old [[DIA]] . Then I expect the market will rezoom (sic) it’s move to the 61.8% Fibonacci Retrace that it’s been pointing toward since the March ’09 lows. That should be about $1,230 or so on the $SPX.
Accompanying this retrace move will be the US dollar getting to at least $80 (on the [[DXY]] ) and [[UUP]] our trusty ETF companion, back to resistance in the $24.05 region. The breakdown from these levels should signal to us it will be time to “Party-on Garth” or similar 80’s era SNL spin-off movie platitude.
The first friends to recover from the coming breather will be our trusty commodities, in the form of gold, silver, platinum, molybdenum, natural gas, and even coal. Oil will trail and probably rise with these sundry boats, but I’d wait on it for the rest of the market. As usual, the Jacksons will take the fore, with Silver Wheaton Corp. (USA) [[SLW]] ($12.50) , [[GDX]] ($42), Royal Gold, Inc. [[RGLD]] ($43), Eldorado Gold Corporation (USA) [[EGO]] ($12.40), IAMGOLD Corporation (USA) [[IAG]] ($13.50) and honorary Jackson Allied Nevada Gold Corp. [[ANV]] ($12.50) continuing their winning ways in 2010, and non-PM Jacksons Thompson Creek Metals Company, Inc. [[TC]] ($11) and Teck Cominco Limited (USA) [[TCK]] ($34).
I even give former Jackson plodder Natural Resource Partners LP [[NRP]] ($23.25) a shot in 2010, as it will rise with the coal stocks. That said, I like Massey Energy Company [[MEE]] ($34-35) and Patriot Coal Corporation [[PCX]] ($13.50-14.00) better for that play.
Shocker, right? Well how about some natural gas picks as well, as I think that sector will also finally run in 2010, mostly on a mean reversion basis. None of this Chinese stuff, though. I think the Chinese will be using all that coal they’ve dug before the natty. No, I like good old ‘Murican gas, in the forms of my old favorite Chesapeake Energy Corporation [[CHK]] ($24.75), NGAS Resources, Inc. [[NGAS]] ($1.65) for a crazy Lotto play and Northwest Natural Gas [[NWN]] ($45) for the “safe utility play.”
Last but not least on my commodity list is the water companies, which I think will also have some mojo in a commodity constrained shrinking dollar environment. There’s been quite a bit of consolidation in the water names, but most of the business remains in public utilities. I think that will change as municipalities feel the bite of lessened garbagio fines and other taxable nuisance fees to pay their egregious unionized work forces a “living wage” (Chicago Speak for $142k a year, pension and health bennies). Municipalities will be looking to offload capital constrained public water assets and these companies will grow.
There’s none I like better than fat, liquid (no pun intended) American Water Works Co., Inc. [[AWK]] ($21.50) and not simply for it’s “Men from Mars” ticker symbol. I think these guys are the gorilla and one to put away for the long haul. There will be more water companies coming public, God willing, and their M&A actions in this market will bring recognition to these names and the value of water assets in the next ten years. I also like California Water Service Group [[CWT]] ($35.50), Aqua America, Inc. [[WTR]] ($15.50) and the risky desalineation play Consolidated Water Co. Ltd. [[CWCO]] ($13.20).
Crazy tech plays you can get from Mssr. LeFly, but I like [[BIOS]] here on a pullback to $8.00. I think once it gets past it’s old highs of $9.82, it’s off to the races. I also like Fly’s Green Mountain Coffee Roasters Inc. [[GMCR]] on a pullback to the $69 range.
Last but not least, I think you need to have some [[TBT]] ($49) in the portfolio. We’ve many deficits to finance before we’re done in 2010 (as much as $1.5 trillion) , and over $2 trillion in short term debt to refinance. I just don’t know how they do that without further pounding the dollar, and putting pressure on interest rates. I like TBT as a hedge and as a long term play, deep into the middle of this coming decade.
2010 is an election year, so I think the pols will try to make it look good at least until November. That means we will get favorable news on tax increases, despite the clamour (sic) of the socialist bodkins on the far Left of the Democrat Party. That’s another reason why I strongly beleive Benjamin- printing will continue into 2011 and on.
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Especially important are my entry prices (highlighted in bold next to the names). I will refer back to this piece in future.
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the prices are dynamic. you may want to copy and paste article, in order to disable quote plugin and keep prices.
No, not the immediate price in the brackets, I’m talking about the bolded “entry price” in parentheses to the right of that. Without some egregious magic, those should remain the same.
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Fly,
Get back in the bed room. Time for a good ol’ spanking.
Clean the damn dishes.
Jake,
Hopefully you have the time and are able to watch the macabre tomorrow.
Canada vs. USA
Thursday at 7:30pm et/4:30pm pt
It will be a “taste of things to come” if you will before the Olympics.
All the best in 2010,
your better looking brother from the north
PS – as our cousins from across the pond say; your blog is the dogs bollocks
Thanks…
Is that hockey you are talking about?
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JG: It’s the World Juniors. No bearing on the Olympics, where the biggest question will be whether the Hosers can deal with all that home-ice pressure and take down hockey Gold.
I will be rooting for my boys of Slovakia & the Czech Republic and going to see at least 1 elimination/qualification game live in February. Maybe more, if we can get some last-gasp tickets from the scalper/price-gougers.
Additional note:
with Canada looking to roll with a line of Crosby – “Staal” – Nash…they should be quite “in tune.”
LOFL.
Jake, I too have water on my list for 2010. It seems that even an old president has purchased foreign land atop an aquifer.
My greater feeling is that it will take water a couple more years to actually come into play as a viable investment commodity, so why not get into it before it becomes more popular.
Its interesting the way ANV has continued to move upwards. Pardon my immaturity, but do most refiners/miners/etc of commodities continue to move even after their goods have lost their value (such as gold).
What do you think about Sugar here?
Thanks for all of your posts. You’ve helped me bank more coin then anyone, and I can follow your logic better than anyone else here.
Here’s to a first quarter 2010 correction of decent enough magnitude to get the wheels rolling on what should be the best century since the mid 1900’s.
Using gubmit satellite photos to purchase land containing natural resources is like trading on insider info isn’t it? So shouldn’t Bush do some Martha Stewart time before he starts selling bottled water, eh?
BU — not quite sure what you mean about “continuing to move even after their goods have lost value,” but the silver and gold miners are extremely sensitive to the FUTURE price of gold/silver. What that means is that yes, miners can continue to do well even if gold and silver pull back IF the market perceives that the future prices will be higher or that other inputs (gas, labor, land costs) will be lower.
This has happened many times in the past, btw. Recently, the price of silver and gold have preceded advances in their miners, but at some point, I expect that relationship to reverse… that is when you know we are past the summer solstice and on our way to winter.
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Jake, you are perhaps my favorite blogger here. But, you don’t know what the January Effect is. The January Effect is when stocks that have been beaten down into the end oft he year rebound do the subsiding of tax loss selling, short covering and re-purchasing after the wash rule period.
I know what the January Effect is. When I said “reverse” I was talking more holistically — about stocks going down instead of the expected “up.”
Second Rule of Jake — I often speak metaphorically, so you should not take my descriptives too literally.
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Hey Jake:
Great blog this year. I have learned a lot.
I was thinking natural gas might be a good play heading into a cold winter. However it seems there is a lot of downward pressure because of some newly discovered reserves. Natural-Gas Producers Seek Long-Term Contracts (http://rigzone.com/news/article.asp?a_id=84813)
What do you think?
I certainly agree this is what has kept natty beaten down for a while. However, it’s a substitute and eventually those cheap prices will encourage switching to natty burning generators, furnaces, etc, etc.
My mother just switched to natty — much of the NE is still burning earl in the their foinaces. The use of natty will continue to expand, and prices will rise as a result.
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“burning earl”: yes indeed, ‘earl’ had to die
Like the H2O call Jake. Bit soon, maybe, especially if you believe that global climate change is one gigantic farce perpetrated by the majority of the world’s scientists educated up the wazzoo on the subject. Thank goodness for the real ‘climate experts’ like Jake, Doug Casey, and Mish Shedlock. Don’t worry that they don’t have a meteorology class between the lot of ’em, just trust them: they KNOW. After all, didn’t one of those so-called climate ‘scientists’ use the word “trick” in an email? NM that its context probably had more to do with the woman he was picking up on a street corner after work than the actual facts of his research, he used the fucker in a sentence, so… haven’t you lot learned ANYTHING from Bill O’Reilly? And FTR:YES, I believe that it will be you and I that will ultimately be bank-rolling any changes TPTB will deem necessary to combat climate change, cleverly contrived by charlatans or not; as if they would have it any other way. If last year’s shenanigans have taught you anything, it had better be just that.
Frankly, where I am at, I’d say we could do with a little warming, as last month we had a record low temp that placed my city as the one of the frostiest places on earth, second only to some region of Siberia, “Veetches Tiyts”, I think its called.
Natty has been kind to me in the past too. Low price right now may be the result of above-ground storage issues, not demand, but when the reserves begin to drop a c-hair below MAX there will deffo be some TASTY volatility.
Belated Happy New Year all. Here’s wishing your 2010 will be as interesting as last year; more if you are boring by nature.
Remember, if the warming bullshit story doesn’t work, use “climate change.”
Didn’t you get the memo?
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I know ‘things change’, but, Jake… really?
” I also like Fly’s Green Mountain Coffee Roasters Inc. (GMCR: 81.47 +1.84%) on a pullback to the $69 range.”
That sounds like outright capitulation to me.
And the POG ‘breather’ is still to come? Again: really? Man, I’ve been panting while I climb dizzying heights since Dec.4 2008, and everbody I know is still filthy lucrative at these prices and even lower, ‘hand over fist’ style. From the action I’ve been seeing the second wind isn’t as far off as you seem to be implying. Just how far off are you implying it is, anyway? A month, three months, a year? How much time is that in DevilDog years? Careful you don’t have to stand on a chair to reach her ‘entry-point’.
Hell, the USD can do whatever it wants, IMHO. The higher it goes, all the better the chance for some people with a mostly red flag divest faster than they will go through firecrackers on St. Valentine’s Day, 2010. Oh, and puhhlenty of others might consider joining the party too. I wonder what would make the short list for the investment of their freshly abracadabra’d wealth….
Please take your medicine before posting. Lucidity is held at a premium here.
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Don’t worry Jake, I’ll continue to give you cogency at half price. But I reserve the right to obfuscate; it keeps the riff-raff guessing…
Agreed on the USD call there. Sort of a win-win situation here for that.
If it goes lower, then investments in commodities rise.
If it goes higher, time to shift to Canadian equities which have US customers.
2010 looks good from here.