December 30, 2011 - Issue #616

In This Issue

1. The Stock Market Is Not Physics: Part I
2. Holiday Trading Hours/Schedule
3. Economic Calendar

Featured Articles This Week

a. The Stock Market Is Not Physics: Part I
b. Preparing Your Finances for 2012
c. The Top 10 Market Myths Exposed
d. The European Debt Crisis and Your Investments

1. The Stock Market Is Not Physics: Part I

The following series is excerpted from two classic issues of Robert Prechter's Elliott Wave Theorist. Although originally published in 2004, the valuable series has been re-released in the Independent Investor eBook, along with over 100 pages of other reports that challenge conventional economic thinking.

Here is Part 1 of the series. Check back in a few days to read Part 2, or you can download your free copy of the Independent Investor eBook here.

See if you can answer these four questions:

1. Question: What will a good computer cost 50 years from today?
   In 1950, a good computer cost $1 million. In 1990, it cost $5000. Today it costs $1000.
2. Question: Fifty years from today, will a larger or smaller percentage of the world's population live under democracy?
   Democracy as a form of government has been spreading for centuries. In the 1940s, Japan changed from an empire to a democracy. In the 1980s, the Russian Soviet system collapsed, and now the country holds multi-party elections. In the 1990s, China adopted free-market reforms. In March of this year, Iraq, a former dictatorship, celebrated a new democratic constitution.
3. Question: What percentage of the time will expansion take place during the decade from 2003 to 2013?
   In the decade from 1983 to 1993, there were ten months of recession in the U.S.; in the subsequent decade from 1993 to 2003, there were 8 months of recession. In the first period, expansion was underway 92 percent of the time; in the second period, it was 93 percent.
4. Question: Over the next 50 years, will the number and sophistication of financial services increase or decrease?
   In 1970, Reserve Funds kicked off the hugely successful money market fund industry. In 1973, the CBOE introduced options on stocks. In 1977, Michael Milken invented junk bond financing, which became a major category of investment. In 1982, stock index futures and options on futures began to trade. In 1983, options on stock indexes became available. Keogh plans, IRAs and 401k's have brought tax breaks to the investing public. The mutual fund industry, a small segment of the financial world in the late 1970s, has attracted the public's invested wealth to the point that there are more mutual funds than there are NYSE stocks. Futures contracts on individual stocks have just begun trading.

Observe that I asked you a microeconomic question, a political question, a macroeconomic question and a financial question.

Read more

2. Holiday Trading Schedule

You can find the holiday trading schedule and futures trading hours for the CME, NYMEX, GLOBEX, EUREX, Nadex, OneChicago, NYSE, and Forex for Dec 30 and Jan 1, 2 and 3 on our website:

New Year's 2012 Holiday Futures Trading Hours/Schedule

3. Economic Calendar

Source: Moore Research Center, Inc.

* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.

** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.

*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!