Are you ready for the first trading day of 2010?  It will no doubt be a challenging year and we shouldn’t expect to see another 30%-40% rise in the overall index like we did off of March lows in 2009.  The real question is if we start the year up or down.

The Upside
With such a successful run up into late 2009 many people with cash on the sidelines are beginning to think that it may be time to get back in to this market before it leaves them even further behind.  With RRSP season about to gear up again, fund flows from the big financial companies could drive prices higher.

The Downside
The unwinding of stimulus funding from governments around the world may have a negative impact on profits from many sectors, causing weaker than expected earnings that might not be able to be supported by an artificially inflated economy.

The Resources Sector
Since penny stock investing in Canada has a large portion devoted to resource stocks it’s good to have an idea of what’s going on with them.  I can see oil going either way from where it is now, based around how the economy performs with reduced stimulus.  If the economy seems to have life, then so will oil prices, otherwise I expect a sharp decline putting us back into the $55 range.   Gold will likely see a lot of selling pressure in the new year as people move towards other investments.  I’m expecting gold to fall below $1000.  Of course, I will gladly be wrong, as there are many golden penny stocks out there that are well served by higher gold prices.

Companies to watch
Western Wind Energy Corp. (WND-V)
This should be a good year for this company. Alternative energy is great field to be diversifying into at this stage. Western Wind Energy is doing all the right things.

Great Western Minerals Group Ltd. (GWG-V)
This rare earth element small cap company has been mentioned here several times before and continues to be of interest and 2010 will prove to be a make or break for this company as an investment. A couple of news items to be aware of (source):

Letter of Intent with Toyota Tsusho: In July, 2009, GWMG signed a Letter of Intent (LOI) with Toyota Tsusho Corporation (TTC) to examine the merits of jointly conducting exploration and development activities on GWMG’s Douglas River and Benjamin River exploration projects.

The LOI term expires on January 7, 2010, and GWMG anticipates a response in early January 2010 with regard to TTC’s on-going intentions.

and

The current drilling program is expected to be completed by March 31, 2010, and results of assays expected to be released shortly thereafter. During the coming year, the company will continue to evaluate the main REE showings and begin the initial evaluation of the targets generated by the airborne geophysical and the stream sediment sampling surveys.

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