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North Korea and 26 Other Worries That May Spoil the Santa Rally

By

Up or down for the year, it'll come down to the wire.

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The Dow Jones Index (^DJI) and gold (GLD) are still up for the year while the NASDAQ (^IXIC), the S&P 500 (SPY), and pretty much everything else is down. Santa rallies keep getting buffeted by European disappointments, the US political iceberg called Congress, and sputtering economic numbers coming out of China. Up or down for the year, it'll come down to the wire – time to go to the whip, Kris Kringle.

For specific comments about each of the fears facing investors right now, visit our interactive page by clicking on the graphic below. You can also scroll down for a text-only version of this column and an explanation of how it works.




Lloyd's Wall of Worry (Text only)

QE: China's turn!

U.S. ECONOMY: Headline news, "Fine." Tagline news, "Land Mine."

UNEMPLOYMENT: Hundred thousand-plus more "job creator" jobs getting cut from the finance industry. Gonna really hurt the dog-walker, home-masseuse, personal-shopper industries hard.

INVESTOR SENTIMENT: Everyone is bleary-eyed and looking toward 2012 with hope except, of course, the algo computers which don't have eyes.

HOUSING CRISIS: "FUBAR" – military slang, do a search on it as this is a family-friendly column.

INFLATION: India clocks in at 9%+…and that's down from last month.

CRISIS OF CONFIDENCE: Along with the Western Black Rhino, hope is officially extinct. Lucky rhino.

EUROPEAN ECONOMY: The "anchor" of the entire global economy -- not literally, but more literally than metaphorically.

THE EUROPEAN UNION: A Greek guy, a Spanish guy, a Portuguese guy and an Italian guy go to a restaurant for dinner. Who pays the bill? A German gal.

SOVEREIGN DEBT: We are closer to finding the God Particle/Higgs Boson than we are to solving this problem. Hey, maybe if we smash all the debt together at near the speed of light….

BOND VIGILANTES: Davies vs. Goliaths. Davies – Bond Vigilantes vs. Goliaths – Central Banks, Davies win but when that one slingshot stone hits its mark is anyone's guess.

CREDIT RATINGS AGENCIES: First rule of the theater: You show a gun on stage, you have to have someone shoot it or you lose all credibility and your audience leaves unsatisfied. Europe is waiting…

IMF: Tag, you're it! And it seems that there ain't anyone else left to tag.

GOLD: A safe-haven asset that is taking a breather while taking the breath away from gold bugs worldwide.

ECONOMIC LEADERSHIP: All us kids waiting by the Christmas tree, waiting on that "Wall of Money," "Buyer of Last Resort" from Santa Draghi.

POLICY CLIFFS: Extension tension as the Payroll Tax Cuts and Unemployment Insurance head toward extinction on December 31, 2011.

BANKS: "SNAFU" – military slang part II. Look it up while checking out FUBAR.

VOLATILITY: "Volatility has been very volatile" my clear-thinking friend Rahul said to me over coffee. Couldn't have said it better myself so I won't even try.

HIGH FREQUENCY TRADING:
Lloyd: What are you doing for the holidays, HAL?
HAL: Depends on what everyone else is doing.
Lloyd: Should have seen that one coming.

CHINA: Can an $11-trillion-plus economy maneuver a soft landing? Maybe, but can they put Capt. Chesley B. "Sully" Sullenberger in the pilot's seat just in case?

STOCK MARKET TECHNICALS: The battle royale with cheese continues at the 200-Day Moving Average.

FINANCIAL FIRM FAILURES: The rumor mill is alive and well and living in Paris.

EARNINGS UPDATES: Less than inspiring intra-quarter updates from across the sector spectrum. Flat is the new up.

CORRELATION: Markets marching in lockstep, no questions asked, no real purpose. Yeah, that worked out real well in North Korea, too.

NORTH KOREA: Well, Mr. Magoo is no longer driving this jalopy…his son is. Fingers crossed.

CREDIT WATCH:
France: Britain Season!
UK: French Season!
France: Britain Season!
UK: French Season!
France: Shoot him now!
UK: Shoot him now!

MIDDLE EAST: Egypt the Sequel coming soon? Honestly I had trouble sitting through the first NC-17-rated version.


What Is Lloyd's Wall of Worry?
by Lloyd Khaner

Welcome to my at-a-glance guide to the issues facing investors this week -- a unique tool for traders and money managers.

Typically the term "wall of worry," refers to the entire body of concerns influencing stock market action. When the wall is high, meaning the market is nervous, stocks tend to get cheaper.

This wall of worry is even more specific. Every week I list the exact concerns in the marketplace and use the list to help me make buying and selling decisions. As I like to say, "Buy fear, sell cheer."

In other words, once the the wall rises above 15 blocks, start looking for deals. If the worry count sinks below 10, consider selling; prices have likely peaked.

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
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No positions in stocks mentioned.
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