The first trading week of 2010 is 2 days in and its looking good so far.  The Dow is up over a hundred points due to substantial gains made on the first trading day of 2010.  The Nasdaq and S&P also followed those gains with more gains today.  How does this relate to the entire trading year? That’s what we seeked.  Looking at the change in the Dow over the first 5 days of each year and comparing it to the entire year’s change yielded pretty unequivocal results.  We’ll let the graph speak for itself.  The data points are collected from this decade and prove that this is a pretty good start to what we predict to be a pretty good year for stocks.

1. Nvidia: We’ve written a lot about the strength of Nvidia in the Tech sector and the incredible upward potential of the stock.  Not to push the meme, but its clear to us, at Fiscal Frenzy, that the strength of the stock is made most evident during bullish market cycles.  As we’ve said, we strongly believe that 2010 will be one of the strongest years of economic recovery for the United States.  Therefore, Nvidia will outperform the markets and see a strong recovery.  As a manufacturer of graphics cards (generally considered luxury items), consumers will be much more prone to buy such products.  Therefore, the technical and other strengths of Nvidia make it our number one recommendation for 2010. 2010 year end Price Target: 29

2. Research in Motion: Another tech stock that we love is RIMM, a company that we believe to have incredible upward potential.  Just looking from the year 2006 to 2007, the stock gained over 400 percent.  Its clear that like Nvidia, RIMM benefits significantly from bullish market cycles.  Thus, with the Dow expected to have another year with gains as large as early 2007, we expect a double in RIMM’s stock bringing our Price Target to 130.

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Today, as the 2009 fiscal year comes to a close, we take a quick look back and a quick look ahead.  Looking back, we see that on January 3rd of 2009, we predicted that the Dow would close the year at 11,000 dollars a share.  Today, the Dow ended the year above 10,500 and made our prediction one of the closest of the year.  Last year in that 2009 outlook we discussed how the stability of the housing industry and the recovery of the banking industry would be the catalysts behind an astounding recovery.  The housing sector has remarkably stabilized and recovered while the banking industry has seen massively robust positive changes since the start of 2009.  As we have said many times before, the one think lacking from the equation is jobs.  Unemployment is thus the pefect segue to our quick 2010 outlook.  2010 will be the year of recovery and will see the strongest recovery since that following the Great Depression.  Unemployment has ticked downward to 10 percent and the US will, in all likelyhood, finally witness job growth this month.  But unemployment numbers will still be sky high and they will only turn around with a substantive reversal in consumer confidence.  That will come, in our opinion near the 3rd month of 2010.  At that point unemployment will quickly decrease and by the end of 2010 Fiscal Frenzy predicts unemployment rates of between 6.8-7.2 percent.  While other indicators will likely slow in recovery, the job growth the US will witness this coming year will lead the Dow up even higher.  In that regard, Fiscal Frenzy sees the Dow ending 2010 at 13,000-13,500 due to very strong recovery in the first half of 2010 followed by a market flatlining in the second half of 2010.  Nonetheless, look for a great year for investors ahead.

As we finish up 2009, and Fiscal Frenzy’s second year, we look ahead to the next decade. The last provided astounding volatility in the markets that was unheard of in the 1990s. As the Dow skyrocketed and was overbought for four years from 2003 to late 2007 it seemed as if the sky was the limit. But eventually interest rates of over 5 percent, substantial outsourcing, increased corruption, and high risk loans took their toll on the speculatively inflated economy. The Dow plummeted and it’s price was cut in half. Banks broke down and automakers went bankrupt. That was the last decade.

The next one will be much greener (hopefully in the sense of green energy in addition to the typical definition of green in investment terms). Fiscal Frenzy believes that just as the 1940s and 50s were decades of consistent economic recovery following the weekness of the 30s, the 2010s will see massive fiscal booms across the board. The financial sector will see the formation of new banks and increased competition, working within the constraints of new financial regulations. The regulations will undoubtedly be substantial enough to prevent financial collapse for the next several decades, since the corporation-government relationship typically works as a reactionary relationship. Likewise, job growth will be very substantive and we will likely witness steady job growth bringing unemployment down to 4 to 5 percent by the end of the decade. Finally, green energy will gain even more momentum. The Copenhaggen summit revealed that nations are feeling the urgency of the climate crisis. This push toward green energy will likely be the biggest economic stimulant since the computer and Internet. Contrary to the late decade of the 2000s, Fiscal Frenzy believes that the next will be a strong one of solid, widespread economic growth.