1. The dollar index.  The story this year has been the continued inverse relationship between the dollar and risk assets.  After selling off in the early part of the year the dollar has overcome significant headwinds and showed resilient strength that looks promising for further continuation upward.   The dollar has gone nowhere in 2011 if we look where it was in January and where it is today, but the intrayear improvement has been remarkable.  The dollar served as the ultimate clue to risk assets all year.

2.   High flyer or beta chaser stocks like Netflix, First Solar and Sina.com came to a hard landing as global economic slowdown and Europe debt crisis fears became front-page news.   As a result many trend-follower funds had a very difficult year.  At the peak this year all of these stocks gave off a strong odor of ‘bubble.’

 

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