Looks like the stock markets made Santa’s naughty list. Last week seemed like things were stabilizing until the Friday afternoon selloff threw that idea out the window. At this point, sentiment is shot. It’s the end of the year. And the Fed has backed itself into a corner – damned if it does, damned if it doesn’t. Because, despite decent earnings and decent economic data, the perception is the economy is rolling over.
So it looks like the lows of 2018 may be revisited soon. Friday’s price action already pulled the major indexes back into correction territory. There’s just very little traction to be had. And unless Jay Powell pulls a rabbit out of his hat, there seems to be little for the market to get excited about this year.
Short of a formally inked trade deal with China, it appears the high for the year was put in back in October. And it appears the low for the year may yet to be seen.
For the week, look for continued volatility as the market searches for a low around 2532 intra-day. If the SPX breach of this level and you have to start looking into 2017-year for support levels… we’ll cross that bridge if (or perhaps when) we get to it. Judging from the futures markets, Monday will open lower. If the Fed-speak is wrong though, a 60-ish point decline for the week is more than possible.
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