Welcome Stockaholics to the trading week of December 26th! This past week saw the following moves in the S&P: Major Indices End of Week: N/A. Bird's Eye view of the Major Markets on Friday: Economic Calendar for the Week Ahead: Sector Performance WTD, MTD, YTD: What to Watch in the Week Ahead: T.B.A.
Investors 'Shocked' As Dow Suffers Longest Losing Streak Since Election TWO DOWN DAYS IN A ROW... The Dow Jones Industrial Average shocked investors today as it suffered a second consecutive day of losses - the first time since before the election... Despite best efforts at slamming VIX once again (for the 5th day in a row), Dow 20k eludes... Another disappointed trader... View image on Twitter US Stock market breadth remains weak... Small Caps and Trannies slipped into the red for the week, S&P (green) managed to bounce off unch for the week... Retail stocks were monkey-hammered - worst day since May - on personal income weakness and reported holiday spending drop... Off the pre-Election lows, Small Caps remain the biggest winner (and Nasdaq the laggard)... As a reminder all of the market's gains of the last two years are in this post-Trump period... Financials slipped lower for a 2nd day (now red post-Fed)... Monte Paschi Sub bonds bloodbath'd as the bailout/bailin looms (20c on the dollar?) But post-Referendum, Unicredit has exploded... Slightly off topic, we note that Indian stocks are now red year-to-date... And Philippines stocks have plunged since Duterte slammed Obama... The USD index limped higher on the day thanks to Sterling and Aussie weakness... 4th day in a row of overnight Treasury selling and US day session buying... Silver took a tumble today after panic bids around the US open, crude fell back into the red for the week... Bitcoin was aggressively bid to 3 years highs (China and India)...
Small caps rally 81% of time in second half of December Historically it is not uncommon for the market to exhibit some first-half of December weakness. This was not exactly the situation this year. S&P 500, NASDAQ and Russell 2000 did decline modestly last week, but DJIA climbed 0.44% higher. And as of last Friday DJIA was up 3.8% in December, S&P 500 2.7%, NASDAQ 2.1% and Russell 2000 3.2%. The concern is absent first half weakness, the second half of December could be a disappointment. Looking over the last 21 years of data, it appears the first half of December does not necessarily make a difference. From the close on December’s options expiration day until the end of the year, DJIA, S&P 500, NASDAQ and Russell 2000 are all generally bullish. DJIA, S&P 500 and NASDAQ post average gains of slightly more than 0.8% and advance more than 60% of the time. Russell 2000 is best, averaging a solid 1.82% gain, advancing 81% of the time (17 of 21). January is laden with key indicators DJIA and S&P January rankings have slipped precipitously as the month has suffered some significant losses over the last 17 years. From 2000 to 2016 both indices declined 10 times; three in a row from 2008 to 2010 and again 2014 to 2016. January 2009 has the dubious honor of being the worst January on record for DJIA (-8.8%) and S&P 500 (-8.6%) since 1901 and 1931 respectively. The first indicator to register a reading in January is the Santa Claus Rally. The seven-trading day period begins on the open on December 23 and ends with the close of trading on January 4. Normally, the S&P 500 posts an average gain of 1.4%. The failure of stocks to rally during this time tends to precede bear markets or times when stocks could be purchased at lower prices later in the year. Last year, there was no Santa Claus Rally and S&P 500 dropped 5.1% in the month of January before bottoming and rebounding in February. On January 9, our First Five Days “Early Warning” System will be in. In post-presidential election years this indicator has a solid record. In the last 16 post-presidential election years 12 full years followed the direction of the First Five Days. The full-month January Barometer has a presidential-election-year record of 13 of the last 16 full years following January’s direction. Our flagship indicator, the January Barometer created by Yale Hirsch in 1972, simply states that as the S&P goes in January so goes the year. It came into effect in 1934 after the Twentieth Amendment moved the date that new Congresses convene to the first week of January and Presidential inaugurations to January 20. January Effect Begins Now Small-cap stocks tend to outperform big caps in January. This is frequently referred to as the “January Effect,” the tendency is clearly revealed by the graph below. Thirty-six-plus years of daily data for the Russell 2000 index of smaller companies are divided by the Russell 1000 index of largest companies, and then compressed into a single year to show an idealized yearly pattern. When the graph is descending, large caps are outperforming smaller companies; when the graph is rising, smaller companies are moving up faster than their larger brethren. In a typical year the smaller fry stay on the sidelines while the big boys are on the field. Then, around late October/early November, small stocks begin to stir and in mid-December, they take off. Anticipated year-end dividends, payouts and bonuses could be a factor. Also, it is at this time of year that of tax-loss selling abates and traders often pick up beaten-down, oversold small cap shares. Other major moves are quite evident just before Labor Day—possibly because individual investors are back from vacations. Small caps hold the lead through the beginning of June, though the bulk of the move is typically complete by early March.
After A Big Start To December, Can We Still Expect Santa To Come? Posted by lplresearch December is living up to its usual bullish reputation, but this year has been atypical, as the gains happened during the first half of the month. As we noted two weeks ago, since 1950*, the average S&P 500 return in December has been near flat as of December 15, then has sported nice gains for the rest of the month to close up 1.6% on average. With the S&P 500 up 2.9% as of December 15 this year, can we except to see Santa and his equity gains after a big start to the month? Or do early monthly gains bring the Grinch later in the month? Per Ryan Detrick, Senior Market Strategist, “December usually has seen all of its gains in the second half of the month, after being flat for the first half. So this brings the big question: what happens in a rare year like 2016? It turns out, we can still believe in Santa, as the S&P 500 has been up for the month more than 2.75% only seven other times since 1950, and incredibly, the S&P 500 was higher during the rest of the month all seven times with an average gain the rest of the month of 1.8%. In other words, it will take a lot more than early strength to keep Santa away.” Here’s another look at the data, but showing the path of the strongest starts to December. Sure enough, they all finish higher, but note that even the pullbacks are modest. Long-Term Look At Recessions And Returns Posted by lplresearch With Christmas less than a week away, we decided to look at historical equity market returns, but in the shape of a Christmas tree. As you can see below, the majority of the returns have been between 0% and 10%, with the more extreme gains and losses taking place less often as the percentages get larger. We added which years included a recession in red, according to the National Bureau of Economic Research (NBER) going back to 1854. Per Ryan Detrick, Senior Market Strategist, “Yes, more recessionary years saw negative returns more often than not, but surprisingly there have been some strong equity returns during years that had an official recession take place. Obviously most of these big gains took place as the recession was ending; still, this is eye-opening and reinforces not focusing too much on just fundamentals, but also incorporating valuations and technicals. ” The S&P 500 Is Breaking Out, Now What? Posted by lplresearch With the S&P 500 breaking out to new all-time highs, the big question is: How high can it go? For starters, the S&P 500 has made seven new all-time highs this month, the most for any one month since November 2014 had 12 new all-time highs. Here’s where things get interesting: The previous two years before this breakout represent one of the tightest two-year ranges ever for the S&P 500. What does that mean? Think about it—all we hear about is how volatile equities have been recently. From the surprise China yuan devaluation that induced a 14% pullback starting last August, to the more than 10% dive to start 2016 due to global growth concerns—volatility has been everywhere in the past year. Not to mention how quickly stocks bounced back after both of those sudden drops. Of course, these shocks came on the heels of more than three-and-a-half years without so much as a 10% correction, so maybe the volatility of the past year is normal and everyone just forgot what volatility is? Last week, we noted the S&P 500 was more than 20% above the February lows and one could argue it is starting a new bull market. In reality, this should probably be considered a continuation of the bull market that has been alive for the past seven years. Building on this, in the two years ending in June 2016, the S&P 500 traded in a range of less than 18%—one of the tightest two-year ranges for the S&P 500 ever. Again, we’ve had some big drops and bounces recently, but looking at the big picture shows there is a good reason to think that the S&P 500 has simply consolidated in a sideways pattern for the past two years—in essence, catching its breath after the huge gains during the previous years. Going back to 1980, three other times saw tight two-year ranges like we are in now, and all three took place ahead of multi-year bull markets. The two-year range before early 1985 kicked off a +80% rise in the S&P 500 over the next two-and-a-half years before the crash of 1987. Then, the tight range of the mid-1990s led to the late 1990s bull market, which saw the S&P 500 soar more than 200% during the next five-plus years. Lastly, a tight two-year range in 2004 and 2005 occurred before a 24% rally in the next 20 months. In conclusion, breaking out of this tight range after two years of consolidation could potentially be a good sign for continued equity gains. For more on the subject of breakouts—and also what worries us about equities—be sure to read our Weekly Market Commentary, due out later today.
Stockaholics come join us in our weekly market poll and vote where you think the markets will end this upcoming week ahead!- Weekly SPX Poll - Sentiment (12/26-12/30) <-- click there! In addition we have our weekly stock picking contest now up and running as well!- Stockaholics Weekly Stock Picking Contest for the Week of (12/26-12/30) <-- click there! ======================================================================================================== In addition as we're coming up to the new year 2017 we've got a handful of new market polls for you folks to vote on- /GC Gold Futures - $1000 or $1400 next? Vote! <-- click there! /CL Crude Oil Futures - $40 or $60 next? Vote! <-- click there! /DX US Dollar Index Futures - $105 or $95 next? Vote! <-- click there! 10-Year Treasury Note Yields - 3% or 1.75% next? Vote! <-- click there! Will the Euro hit parity against the USD in 2017? Yes or No? Vote! <-- click there! U/J - 130 or 100 next? Vote! <-- click there! SPX Poll - 2350 or 2150 first? Vote! <-- click there! Fed Poll: How many times do you think the FOMC will hike rates in 2017? <-- click there! SPX Poll - What do you think will be the HOY in 2017? <-- click there! SPX Poll - What do you think will be the LOY in 2017? <-- click there! ======================================================================================================== And lastly here are our upcoming monthly, quarterly, and yearly stock market polls & stock picking challenges to kick off 2017! First the polls- Monthly SPX Poll - January 2017 Sentiment <-- click there! Quarterly SPX Poll - Q1 Sentiment (January - March) 2017 <-- click there! Yearly SPX Poll - 2017 Sentiment (Jan. - Dec.) 2017 <-- click there! And here are our stock picking challenge threads- Stockaholics January 2017 Stock Picking Contest <-- click there! Stockaholics Q1 2017 Quarterly Stock Picking Contest <-- click there! Stockaholics 2017 Yearly Stock Picking Contest <-- click there! ======================================================================================================== And finally we have a 2017 predictions and stock market calls thread now open ... do you have a prediction for 2017 (whether that be a stock market prediction or a sports prediction, etc?) post 'em up in the thread link below! 2017 Predictions & Stock Market Calls <-- click there! It would be pretty awesome to see you all join us and participate on these sentiment polls & challenges as we close out 2016 and open 2017! Have a fantastic Christmas weekend everyone!!!
You guys will notice that I am getting a super early start to next week's discussion thread. This is because I will be heading out with my family in a little while for a little Christmas vacation and I will not be back until after the weekend, thus I will not be able to setup this thread later. But, before I head off here I wanted to quickly wish all of you and your family and friends a very Merry Christmas and a Happy, healthy, and prosperous New Year 2017 ahead! I hope you guys have an awesome time with your family & friends wherever you guys intend to spend this holiday! Enjoy it and be safe!!!!! And thank you all for making this 2016 an awesome year here at Stockaholics! I can't wait to see what 2017 has in store for us all!! If you guys haven't already, joins us on our official Stockaholics X-mas and New Year's thread here- Merry Christmas and Happy New Year 2017 Stockaholics! <-- click there! Also here is the Globex holiday schedule for this Monday as the cash markets will be closed in observed of Christmas Day.
Glad to see you taking a break, @Cy McCaffrey! Hope you're enjoying Family & the warm Carolina weather I'm going to play the role of Scrooge McRUT, despite all the evidence you posted to the contrary! For starters, I am really hoping to see this resistance TL hold up... As well as this this Linear Regression Curve...note: still seeing expanding (albeit slightly) Histogram movement to the downside... But who knows...short trading week + who doesn't love a Santa Claus Rally + Trump-o-nomics...I'm not going to hold my breath...nor am I going to put much weight in this week for any indication (Ha! I say that now!) Merry Christmas! But can I get a Bah Humbug, RUT?!
@Baggi nope. as i had posted the globex christmas schedule on post #8 here, the globex (futures) re-open isn't until 6pm eastern time tonight (monday). usually the globex session is open on holidays, but not today. it's closed all day today in observance of xmas day.
I wrote my question poorly. I mean, does it open on Monday like it does on Sunday. It seems by your answer that they do, at 3pm here on the west coast.
So we have my two trend lines still intact and we are currently bumping up against the underside of the shorter term hourly trend line. This looks like a reverse head and shoulders to me, we'll see if that plays out.
TSX Trading Hours Regular trading hours for the Toronto Stock Exchange (TSX) are Monday to Friday with an opening time of 9:30 a.m. and a closing time of 4:00 p.m. Each day it is open, It is important to also note that some U.S. holidays may affect trading on the TSX for equities traded in U.S. dollars. Note that when a holiday falls on the weekend Saturday or Sunday, the stock markets will be closed the next calendar Monday in lieu of the weekend holiday. Here you will find the Toronto stock exchange holidays calendar
Interesting: bloomberg U.S. Consumer Confidence Jumps to Highest Level Since 2001 Consumer confidence climbed in December to the highest level since August 2001 as Americans were more upbeat about the outlook than at any time in the last 13 years, according to a report Tuesday from the New York-based Conference Board. Key Points Confidence index increased to 113.7 (forecast was 109) from a revised 109.4 in November Measure of consumer expectations for the next six months rose to 105.5, the highest since December 2003, from 94.4 Present conditions index fell to 126.1 from 132 Share of Americans expecting better business conditions six months from now rose to 23.6 percent, the highest since February 2011, from 16.4 percent
Since 1950 the day after Xmas is the most likely day out of the entire year to be higher on the SPX (since we were closed yesterday today sorta counts as the day after Xmas)
Also interesting is that last week saw the smallest intraday swings in the SPX for an week, ever ... I wasn't around on Friday but evidently the DJ30 traded in its narrowest intraday trading range on a % basis in about 30 years ... wow
