Welcome Stockaholics to the trading week of December 25th! This past week saw the following moves in the S&P: Major Indices End of Week: Bird's Eye view of the Major Futures Markets on Friday: Economic Calendar for the Week Ahead: Sector Performance WTD, MTD, YTD: What to Watch in the Week Ahead: Monday Markets closed for Christmas holiday Tuesday 9:00 a.m. S&P/Case-Shiller home prices 10:00 a.m. Consumer confidence Wednesday 10:00 a.m. Pending home sales Thursday 8:30 a.m. Jobless claims 8:30 a.m. Advance economic indicators 9:45 a.m. Chicago PMI Friday Final trading day of the year
Bitcoin Bloodbaths Most In 4 Years As Stocks, Bond Yields, & Bullion Bounce It was quite a week... Dow, S&P up 5th week in a row VIX up Long Bond's worst week since the election HY Bond down 4th week in a row Bitcoin's worst week since Dec 2013 Gold's best week in 2 months Copper's best 2 weeks since election But cryptocurrencies made all the headlines this week... With Bitcoin crashing 43% from its highs before stabilizing around $13,000... And then spiking above $14,000 into the US equity cash close... On the week, Gold gained 1.6%, Bitcoin dropped 28% (the first time that's happened since the first week of September) and is the worst week for Bitcoin since Dec 2013... Arbs disappeared across the crypto space as volumes picked up in futures... Futures were halted numerous times this week but as is clear there was a bid off the lows this afternoon as panic-sellers left the market... Limit Down Halt in CME Futs today... (NOTE - one-way street lower since CME opened its Bitcoin Futures) Ethereum, Litecoin, and Bitcoin were lower but Ripple managed gains on the week... but not before flash-crashing to unch today... As we transition to equity market-land, it is worth noting that the cyrpto carnage leaked over into several firms... Stocks were higher on the week... but S&P, Dow, and Nasdaq were not very impressed with the greatest tax cut in the history of man...Trannies were best on the week... While stocks were higher, so was VIX unusually... Unsurprisingly, High-Tax companies outperformed Low-Tax companies on the week - back to cycle highs... Financials ended the week higher but were a mess... But it's not all shits and giggles - there is serious professoinal selling pressure (Bloomberg's SMART money flow index is seeing its worst month since June 2015 as the major indices are rotated to retail)... And High Yield bond land is getting ugly again... It was an ugly week for the long-end of the yield curve - the worst yield increase since the election - but that rolled over as we suspect the record spec long squeeze was flushed... The yield curve steepened most since the election... but the last two days saw the trend reverse... The Dollar Index slipped lower on the week but was very rangebound... Copper stood out in the commodity space (note the pre-open ramp every day) as PMs and Crude seemed to group-hug around a 1.5 to 2% gain... As Bitcoin collapsed so a bid for that other 'alternative currency' - PMs - was very evident...
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD thus far in 2017- S&P sectors for the past week-
Three Trading Days after Christmas Historically Positive Although the three trading days before Christmas were somewhat lackluster this year, the three trading days following the Christmas holiday break, also bullish track record over the past 31 years. These three days also rank near the top when compared to all other market holidays. Average and median gains across DJIA, S&P 500, NASDAQ and Russell 2000 are fairly stable and consistent on each of the days following the Christmas holiday. These three days are the heart of the Santa Claus Rally (SCR) this year. A positive SCR is this first step toward a positive January Indicator Trifecta which historically as preceded well above average performance in past midterm years. Advance/Decline Lines Turn Corner – Additional Upside Likely Although the major indexes retreated slightly today, the upward trajectory that was established in their respective advance/decline lines late last week and yesterday is likely to remain intact. Declines were mild. S&P 500 slipped nearly one-third of a percent, DJIA was down just 0.15% and NASDAQ fell 0.44%. The Russell 2000 small-cap index fared the worst, off 0.77%. NYSE and S&P 500 advance/decline lines reached new highs yesterday ending a brief streak of sideways movement. NASDAQ and Russell 2000 advance/decline lines could be turning a corner after steadily heading lower since late November. As long as all four advance/decline lines continue to move higher, then the major indexes will likely resume their rally. Then look for the Santa Claus Rally to carry the indexes higher into the New Year. 2018 Wall Street Strategists’ Year-End Price Targets Dec 21, 2017 At the end of each year, we always like to take a look at where Wall Street strategists think the S&P 500 is headed over the next year. According to Bloomberg, the consensus S&P 500 price target for the end of 2018 stands at 2,854. That would represent a 2018 gain of roughly 6%. Below, is a look at consensus year-end price targets for the S&P 500 for every year going back to 2000. For each year, we show where Wall Street strategists saw the S&P 500 trading at the end of the year, the estimated annual percentage change based on the price target, and the actual percentage change that the S&P 500 experienced that year. Typically strategists project a gain of 9.3% for the S&P 500. That’s not surprising given that the S&P has historically averaged an annual gain of about that amount. In 2016, Wall Street strategists were spot on with their year-end target, missing the actual mark by just 1.1 percentage points. In 2017, however, strategists severely underestimated things. While they were looking for a gain of 5.5% this year, they undershot the actual mark by roughly 14 percentage points. Underestimating is something strategists have done for most of this bull market. In the 9 years since 2009, strategists underestimated the actual move 7 times. Also, notice that since 2000 there hasn’t been a year where the consensus year-end price target was negative. With a price target that suggests a gain of roughly 6% in 2018, strategists are slightly more pessimistic than normal given that their average target over the years has called for a gain of 9.3%. Homebuilder Sentiment Goes Beyond the Bubble Dec 18, 2017 In last week’s B.I.G. Tips report on Retail Sales for the month of November, we noted that the internals of the report were “suggesting strength in the housing sector.” That idea was confirmed in the just-released December Homebuilder sentiment survey from the NAHB. While economists were expecting homebuilder sentiment to increase slightly from 69 to 70, the actual increase was much higher to 74. To put that reading in perspective, going all the way back to the report’s inception in 1985, there have only been six other months where the index was higher, and they were all back in 1998 and 1999. In other words, homebuilders are currently more optimistic than they were at any point during the housing bubble that peaked in 2005. Looking at the internals of this month’s report, practically every metric was strong. Present and Future sales, as well as Traffic all saw healthy gains, with both Present Sales and Traffic surpassing their highs from the bubble. In terms of regional sentiment, we also saw healthy gains in every region except the Northeast where sentiment dropped by a rather large eight points. This leads one to ask if this is the first example of side effects of the GOP tax plan showing up in economic data. Given the generally high real estate taxes in this part of the country, it is expected to be among the most negatively impacted by the plan working through Congress. The chart below shows the regional breakdown in sentiment over time. Here, it is interesting to note that the only region of the country where sentiment is higher than its peak at the bubble is the Midwest. The South (75 vs 77) and Midwest (85 vs 91) are relatively close, but not quite there, while sentiment in the Northeast remains well off its prior highs (53 vs 74). As a final note with regards to the large drop in sentiment for the Northeast, we would note that November’s reading did see a big spike, so December’s decline may have just been a little bit of giveback. Even still, the implications of the tax bill certainly aren’t going to have a positive impact on sentiment in the Northeast in our view. Rates Move Higher Globally Posted by lplresearch The 10-year Treasury yield had been trading within a historically tight range of just under 0.1% since late October (the tightest trading range of that length since 1974, as outlined in our recent Bond Market Perspectives, “Nothing Ado About Much”). But that all changed on December 19 as a confluence of events—some international and some domestic—helped move rates higher globally. Recent comments from several European Central Bank members indicated that a shift away from quantitative easing as the primary driver of monetary policy and toward interest-rate driven policy is under consideration, which helped drive rates higher. Meanwhile, an announcement from the German government that it intends to sell more long-term debt also contributed. Rates moved higher still on Wednesday as both houses of Congress passed the tax reform bill, which helped lead the 10-year Treasury yield to 2.5%, its highest close since mid-March 2017. The selloff in sovereign bonds (and resulting higher yields) appeared to be taking a break as we wrote this blog; however the key takeaway is that foreign rates continue to impact U.S rates (as outlined in our Outlook 2018 publication). As we move toward an environment where global central banks may start to dial back monetary accommodation, overseas rates could move higher over the course of 2018, which would also lessen their drag on U.S. rates. This factor, along with the potential for moderate U.S. gross domestic product growth and rising inflation , lead us to believe that rates could move moderately higher over the course of 2018, with the 10-year Treasury potentially ending the year in the 2.75% to 3.25% range. What Does a 20% Gain Mean? Posted by lplresearch Yesterday, the S&P 500 Index price return surpassed 20% for the year, which could be the first 20% gain since 29.6% in 2013. What does that mean, other than the obvious answer that stocks had a great year? Per Ryan Detrick, Senior Market Strategist, “One might think the year after a 20% gain tends to be weak, as the big gains are digested. But, the year after a 20% gain actually tends to be stronger than the average year.” Since 1950 there have been 18 years that saw a 20% gain, and incredibly the next year was higher 16 times (83.3%) with an average return of 11.2%.* Compare that with the overall average year seeing the S&P 500 up 8.9% with positive returns 71.6% of the time, and it is clear that banking on weakness the year after a 20% gain may not be the best plan. So how rare is a 20% gain? Turns out they aren’t all that uncommon, as over the past 67 years (since 1950) there have been 18 years that finished up at least 20% (26.9% of the time). Considering that 19 years during the same period saw negative returns, you could argue the likelihood of a single year finishing in the red is nearly the same as a year finishing up 20%. As it turns out, big returns aren’t quite as unusual as they might seem, and history would say a 20% gain in 2017 would only add to the odds that the bull market continues in 2018. A Trip Down Memory Lane Posted by lplresearch With the S&P 500 Index flirting with a gain of 20% for the year, one technical formation took place in 2016 that was a clue that we could be in for solid gains. But before we get to that, below are some of our blog posts from earlier this year that suggested 2017 could shape up to be a banner year: When the S&P 500 is up more than 1% after the first five days of the year, the full year is higher 88.5% of the time and up 15.1% on average. When the S&P 500 is higher in January, the next 11 months are higher 88% of the time and up 12.1% on average. If the S&P 500 is higher in both January and February, the full year has been higher 25 out of 26 times and up 19.5% on average. When the S&P 500 is up more than 5% in the first quarter, the final 9 months gain another 9.6% on average and are higher 87.5% of the time. Finally, when the S&P 500 is up by more than 8% at the midpoint of the year, the final six months are higher 21 out of 25 times. Turning to the technicals, 2016 saw the S&P 500 trade below the 2015 low and above the 2015 high, before closing above the peak in 2015. Although that sounds quite confusing, this rare formation is called a bullish outside year. The previous two times this happened were in 1935 and 1982, with gains of 27.9% and 17.3% the next year, respectively.* Per Ryan Detrick, Senior Market Strategist, “The sample size is so small that your high school stats teacher would probably claim the results weren’t significant and should be ignored. But to us, the outside year in 2016 was yet another small clue that the bull market would continue in 2017.” Below is a chart that we shared back in January that paints the picture.
Stockaholics come join us in our weekly market poll and stock picking competition for this upcoming trading week ahead!- Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (12/25-12/29) <-- click there to cast your weekly vote and post your weekly picks for this upcoming week ahead! ======================================================================================================== And lastly here are our 2018 threads to kick off the new year! Stockaholics Daily Stock Pick Challenge & SPX Sentiment Poll for Tuesday (1/2) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (1/2-1/5) <-- click there to cast your weekly market vote and stock picks! Stockaholics January 2018 Stock Picking Contest & SPX Sentiment Poll <-- click there to cast your monthly market vote and stock picks! Stockaholics Q1 2018 Quarterly Stock Picking Contest & SPX Sentiment Poll <-- click there to cast your quarterly market vote and stock picks! Stockaholics 2018 Yearly Stock Picking Contest & SPX Sentiment Poll <-- click there to cast your yearly market vote and stock picks! SPX Poll: How Bullish or Bearish are you on the markets in 2018? <-- click there to cast your vote! Fed Poll: How many times do you think the FOMC will hike rates in 2018? <-- click there to cast your vote! 2018 Predictions & Stock Market Calls <-- click there to post your 2018 predictions and market calls! ======================================================================================================== It would be pretty sweet to see some of you join us and participate! I hope you all have a fantastic holiday weekend ahead!
I had this posted up on our SCR thread and also figured to post in here as well for those of you who are interested to track how the SCR (Santa Claus Rally) is doing in real-time. Click the button below to track the 2017 SCR in real-time- The SCR concludes at market close on Wednesday, January 3rd, 2018. Here is where we stand after Day #1 today:
And finally for those of you who need to know, the CME Globex futures will be closed all day on Monday for the Xmas Day holiday. Merry Christmas to everyone on Stockaholics! I hope you all have a very safe and wonderful holiday!
hope everyone had a very nice christmas! so, what do we all got on the radar heading into these final 4 trading days of 2017? are we thinking higher, lower or about flat this week? anything noteworthy to keep an eye on as we close out this trading year? any good setups? good luck to all who are still trading, in this final week of the year!
financial stocks with selling.... must be getting ready to turn the Catalonia thing into another Greece BS news event to pull back markets?...just a hunch
I have only one friend with the new X phone, he got it because his company pitched in for half the cost, he was due for a new phone, he put in the remainder and got the best one. I know a few people that will be going for it, but this is probably a good test of the market, lets see how many people are willing to shell out $1000 for a phone. I suspect it will be more than we expected!
If I were to get a newer iphone I'd probably go for a iphone 6 or 7. Looking at samsung & droid's at the moment....thinking of completely getting away from apple.
I had the iphone 3, I switched to Android and have never looked back. One of the biggest issues moving to Android was losing facetime, but with the app called Google Duo, that is no longer an issue. Duo offers facetime like calls between any phone, works great!
Catalonia ....voted on independence from Spain http://www.foxnews.com/world/2017/1...for-independence-from-spain-what-to-know.html
