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DOW + 323 = 17,907
SPX + 36 = 2062
NAS + 85 = 4736
10 YR YLD + .06 = 2.01%
OIL + .08 = 48.73
GOLD – 2.20 = 1209.90
SILV – .16 = 16.48

Since 1928, the Standard & Poor's 500 has started the year with 3 straight losing days eight times. And only once has the S&P 500 finished one of those years in the red. During the 8 years since 1928 that the S&P started with 3-day losing streaks, the index has returned 8.3% on average. For all years since 1928, the S&P has returned 7.5% on average. Maybe it's a good thing to start the year with 3 straight losing sessions.

Then there is the idea that the first 5 trading sessions of the year can be used to extrapolate the direction of the market for the year. If that is the case, then we might expect some rough sledding for the markets in the early part of the year followed by a strong second half of the year. This is a variation on the idea of the January barometer, which says (basically) that if January is positive, the year will be positive, and vice versa; that didn't work last year, but it is accurate about 89% of the time. Of course, that's just probabilities and tendencies. We don't know where the market will go in the first half or the second half. Nobody knows. What we know is that the stock market goes up more than it goes down.

There is concern that the Federal Reserve will raise interest rates, essentially taking away the punch bowl from the party. The FOMC minutes released yesterday indicated the Fed will be patient about raising rates. Wall Street will likely throw a little tantrum when they do hike rates; and if they don't raise rates, Wall Street will likely throw a tantrum because the concern would be that something is wrong with the economy that would prevent a rate increase.

Raising rates should not mean the end of the bull market. The economy probably is strong enough to handle tightening by the Fed. If that was all we had to consider, then this should be a good year for the markets. The reality is that the economy is much stronger than most people are willing to admit; it isn't perfect; I've never seen a perfect economy, but it is decent and it's getting better all the time.

Think about it, and try to be objective. Interest rates are low; the yield on the 10-year Treasury note is right around 2% and that means mortgage rates for a 30-year fixed mortgage are under 4%; you might even get a 15 year mortgage for under 3%. That's fantastic.