The bond selloff was a clear result of politicians having favored the Bush tax cuts over spending cuts. While in my view the extension of lower taxes in itself is a good thing, with nothing but red ink in sight, the bond market saw things differently and higher rates caused prices to pull back.
The dollar rally pulled gold off its lofty levels, joined by silver, while copper bucked the trend under the assumption that the tax cut extension may produce more economic growth.
The market’s still look like they are going through a consolidation phase, which may form the base for the next leg up. Again, a new driver is needed to push the major averages to the next level.
As I posted Monday, this is the time to watch for yearend distributions in your holdings; be sure to adjust the high prices downward to be in tune with the correct trailing sell stop points.