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Forex Trading Reviews & News 
The week of January 18th is the beginning of a new earnings season of reporting for some of the largest companies in the world. Maybe it is good that "Blue Monday" was a holiday. The bad news about that is maybe it has caused some people to evaluate where we have been in the last year. Is it time for a real retrace in the market? That seems to be on the minds of some traders since the 2nd Quarter earnings season. This was in early July 2009 with new earnings after companies made large cutbacks.
The result was decent numbers without the proper context. This context would be growth on the top line (revenue) versus bottom line (revenue minus expenses equals profit). Many investors were looking for any good news. The focus was on profits (with little concern about top line numbers). This continued the rebound that was progressing after the market low in March 2009.
In the summer, these numbers were enough for some to wonder about the market continuing to become overvalued since there had been an absence for any meaningful retracement. As time wore on and fall came around, more optimism started to take hold in the market and it kept going as unemployment gains were starting to level off.
Many pundits, commentators, and experts began to wonder about the possibility of a v-shaped recovery rather than a u-shaped recovery. In reality, the recovery will be a jobless recovery. Companies have cut off arms and legs and were adapting remaining workers to handle temporary increases in demand. Some companies chose to account for the increase by hiring temporary workers through laid off workers or through temp agencies.
As the hopes faded of a v-shape recovery after nine month of speculation, the second week of January 2010 started showing signs of weakening confidence. The market has been slowly rising through where it spent most of the time in the last ten years. In essence, the market has been ranging during robust economic development based upon a bubble (housing) that was preceded by another bubble (Internet). Albeit, there have been worldwide events that have kept people skittish or have impeded progress through growth.
The main difference between now and the last time the market hovered around this area is the economic numbers that were seen during growth periods. The world is nowhere near the volume it was and yet investment dollars have been put back into the market primarily based upon speculation with cautious optimism as if it was the 800 lbs. gorilla in the corner. After experiencing two decades of some sort of bubble, this begs the question; will the upcoming decade see another bubble of some sort? Commodities and metals? Who knows, but we will find out in time.
My analysis is that we will not see a rebound until the US midterm election results in November 2010 are known and when the new term of Congress is sworn into office in January 2011. There was a glimpse of what might be taking shape based upon the special election in Massachusetts. This is the election of Republican Scott Brown on January 19th to the US Senate seat that was vacated by the late Ted Kennedy last year.
With the approval numbers and the dissatisfaction people are having now that the honeymoon is over for this administration, there has been a desire for a different direction. Investors, decision makers, and those who hold the purse strings are not eager to invest in new development or continue with previous plans because of the uncertain regulatory environment, anti-business attitude, and alarming spending habits that have persisted with the current administration and this term of Congress. The announcement from the White House on January 21st about tougher regulations on banks seemed as if it was punishment for the special election in Massachusetts and the market dropped in response. This economic-political climate is keeping wallets closed or influencing people to move money to other parts of the world like southeast Asia and Oceania, which includes Australia and New Zealand.
George Rozansky is a Forex and stock trader and owner of http://www.managedforextrades.com and co-founder of http://www.ircforex.com.
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