The Anti Prediction

It is the time of the year when everyone puts out their predictions for 2010. I have been reading many of these predictions for the past few weeks. The most common prediction I have seen is that the first half of 2010 will be great while the second half will be a disappointment. I had also thought that was a likely outcome, but am now questioning it.

It is very rare for everyone to be correct in markets. That would either mean that we would first need a stiff shakeout before a first half of 2010 rally or that the first half will be lackluster. A strong pickup in cash M&A would go a long way towards helping the crowd, but absent that I am becoming more pessimistic on the first half of 2010.

5 comments:

nicasurfer said...

Technically speaking i am with you ,but i am sick of shorting this market. Would like a nice 10% correction.

Tsachy Mishal said...

I am not shorting this market yet. I am short SPY but have longs. I am roughly dollar neutral, although my long are lower beta.

Anonymous said...

i think the smart money prediction is that the mkt rallies from here till the first week of January and pulls back strongly.

El Arian said the mkt is going to pull back 10% very soon.

But I see a lot of year end targets of 1200,1250, and even 1150(El Arian's) for the entire year.

I think the mkt is going to be pretty flat in 10 compared to this year.

It's gonna be a tougher year to make money unless you sell deep out of the money calls and puts.

Anonymous said...

Sounds like last year's prediction of an Obama inauguration rally starting Jan 20. Remember how that turned out.

Tsachy Mishal said...

Nice point on the inauguration rally. The rally eventually happened but first everyone looking for the rally was flushed out.