Ribbon and Bows

No full trading trading days left this year. For the week, the markets are closed on Friday, and trading is shortened on Thursday. The same will be true the following week. So this blog will be similarly short…

During short trade weeks – especially around major holidays – it’s not uncommon to see trading volume drop and volatility climb. Historically this could be explained by fewer traders physically being on the trading floor. Today so many trades are placed by computers and algorithms this may not be as much of a “thing” as it used to be. Nevertheless, with mechanically fewer days left to trade, it’s likely the markets will not materially rise or fall from here.

You’d think with a stimulus bill muddling through Washington the markets would be more excited. But no, futures are negative for the open on Monday. It seems the concern is now about a different mutation of Covid spreading across the pond. Will this render the vaccine ineffective? (If so, things could get ‘interesting.’) It’s quite early to tell. However, the ‘what if game’ is enough to make the markets marginally worried at the open today.

For this week, just look back to last week. Odds are very high we’ll trade between the highs and lows — so a low of 3645 and a high of 3725. Should a bid emerge resistance would be about 3760.

So there’s not a ton to talk about. Yes, DC got some stimulus passed. There’s not a ton that appears to be ending up directly in the hands of consumers. So there are still lots of questions to be answered. As clarity emerges perhaps the markets will become more optimistic. For now, it looks like markets will bounce around in a similar range to the last three trading weeks or so.

In short: the Santa Claus Rally may be about over…

Hurray… next we can talk about the January Effect! (So many superstitions, so little time)

As a random aside: today is the shortest day of 2020 in the northern hemisphere… winter solstice. Just a bit of reminder trivia there, too.

For bragging rights… the projections created on 1/9/2020… which have been unaltered for the year (despite Covid)… were for the S&P 500 to close at 3577, with an extreme price target of 3770. (It’s looking like those projections faired pretty well this year.)

And that’s it… we’ll keep it short because it’s a holiday week for this author too.

Wishing you a wonderful Holiday season, Happy New Year, and from my home, a very Merry Christmas. Cheers!

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