It's a New Year! And you know what that means...

It's a New Year! And you know what that means... everybody and their dog will be offering their "set in stone" predictions for the year...

You've probably started to see it already.

Each year at this time, as the previous year's calendars are trashed and new ones are magnetized to millions of refrigerators across America, hundreds of "pundits" in one expertise or another feel it is extremely important to offer their prognostications for the New Year.

From what movie or rock stars will be "in" or "out" this year, to what we "should" or "should not" be wearing, you name it... SOMEONE will be making some sort of prediction one way or another.

And that goes for the financial markets as well.

Take the stock market.

I've already seen lots of market optimists stating without any hesitation that the recession we seem to be mired in right now will play itself out over the next six to nine months. And then everything will be rosy again.

But on the other side of the coin, I've also seen Grinch-like market curmudgeons pontificating we're heading towards Great Depression II, with all the dire consequences involved. These happy souls see us in a nasty bear market for the next ten years, at least!

So where do I stand on all this?

Well, if you've followed me for any length of time, you'll know that I lean towards the optimistic, bullish side of things in general. Yeah, the economy is in bad shape, but we've been in MUCH more dire straits before.

Just take a look at the unemployment rate now vs. the last Great Depression. It's not even close! We're talking about a 6.7% rate now (according to the Bureau of Labor Statistics) to an almost unbelievable 25% during Great Depression I. And the 50-year historical unemployment rate is 5.97% - not too far off from where we are right now.

Can it get worse? Sure.

But 25%? C'mon. I think even OUR government is smart enough to keep us from hitting that astronomical amount of unemployment. Like a headline in today's Investor's Business Daily states: "The Sky May Be Lower But It Isn't Falling."

And going back to the stock market, we may have bottomed already. In fact, I think we're in a new uptrend.

Take a look at a daily candlestick chart of the Dow Jones Industrial Average to see what I mean. I'm seeing a clear bottom on November 21, 2008 with the Bullish Engulfing signal on high volume. We've seen "higher lows" on each pullback attempt since then. Not to mention the Reverse Head and Shoulders bottoming formation from our Technical Analysis lessons.

Which brings me to my final point I'd like to make about market predictions at this stage. And that is this...

There's no real harm in reading as many of them as you come across. They make for (sometimes) interesting and provocative reading. But as far as using them in any way to improve your financial condition, for the most part, here's my recommendation...

Ignore Each And Every One Of Them!

They hardly ever come true - at least across the board. Sure, once or twice some pundit will hit the nail on the head, but then again...

A Stopped Clock Is Exactly Right Twice A Day!

And anyway, you simply don't need some fortune telling stock market psychic to tell you what to do. The market itself will tell you that, if you know what to pay attention to.

I'll help you with that as much as possible in 2009, so stay tuned...

Things are about to become VERY interesting!