It’s hard to believe that the crazy — yet profitable for many — year of 2011 is almost behind us. Stellar corporate earnings, explosive IPOs and domestic economic progress was marred by severe issues in the euro zone and out of control, aggressively negative rating agencies at the highest level. Not to mention the still very troubled U.S. housing market and Jon Corzine’s debacle with MF Global doing their part to hold back the raging stock bulls. Although these negative factors caused stocks to dip below the year’s starting point, it appears the major indexes will close in positive territory for the year.
As we are about to enter 2012, the year that the Mayan calendar terminates and end of the world conspiracy nuts are calling for Armageddon, what can traders expect?
Well, putting aside all the end of the world nonsense, traders can likely expect more of the same in 2012. Much is still up in the air regarding the euro zone crisis. The latest data makes it appear that things are improving across the Atlantic. The IMF just approved a multi layered cash infusion program for the struggling economies. Not to mention the pending economic cooperation between France and Germany. To be sure, issues will continue to creep up in the euro zone. Between S&P’s threatened downgrades and emerging Italian trouble, things are far from perfect. However, positive change has started. It looks like the worst is behind us. This can only bode well for the stock market in 2012.
Domestically, 2012 is a presidential election year. Stocks tend to perform above average during these times. It really doesn’t seem to matter what political party takes the White House. Republican or Democrat, both appear to have equal effect on the stock market.
The latest numbers make it clear that the economy is on the upswing. If this continues and the euro zone situation mellows out, traders can expect a solidly bullish year in 2012. Happy trading!
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