Europe is continuing to look bad.

All bets for the dead of winter are off for traders.  The FED and an assortment of other nations propped up European Union and the failing Euro a couple weeks ago.  This gave the EU a chance to get their act together, solidify their banks, and show that they were serious about fixing their debt and spending problems.  They were thanked by a European Union holding a conference were they did not accomplish anything except ensuring that the United Kingdom would not fully endorse the austerity measures proposed by the EU.

Until we can get a solve on the SPIIFS (Spain, Portugal, Italy, Ireland, France, Super Stuid Greece), the US markets will not be able to go much higher.  They will continue to be weighed down by the US financials which are levered to Europe.  Plus China is in a slow down.  This makes the outlook for early 2012 bleak.

I think that there is still a decent chance to get some gains in strong American stocks, retailers mostly, because I feel that we had a great holiday season in 2011.  I will be looking for a decent run up in the next couple weeks that hopefully allows me to grab some quick profits before the long cold hard winter is really upon us and the European debt crisis tears the markets down to lower levels.  One really bad day in the next couple weeks will force me to rethink that strategy.  Hopefully, I am correct about the strong holiday season and Europe doesn't boil over until we get into January.  This will give me a chance to transition into a cash position on strength. There has to be lower levels coming so unless you have some good long term positions it is time to protect capital.

Hopefully, there will be a capitulation on the Euro and the EU over the winter so that the markets can move forward.  This problem has to be solved for the US indexes to go significantly higher. Once I am mostly in cash I will look to try to trade a bit on the dips and rips while I watch the stocks of great companies go lower and lower.  The more the market goes down the better the buying opportunity will be come spring and early summer.