11 Minute Read

Market Recap December 22, 2016

December 22, 2016

By

MR
MARKET SNAPSHOT
Dow19918.88-23.08(-0.12%)
Nasdaq5447.42-24.01(-0.44%)
SP 5002260.96-4.22(-0.19%)
10-yr Note-4/322.554
NYSEAdv 1242Dec 1692Vol 882.6 mln
NasdaqAdv 1020Dec 1978Vol 1.44 bln

 

IN THE NEWS HIGHLIGHTS:

  • Quiet session expected as holiday weekend nears.
  • Crude oil finishes slightly higher.
  • U.S. Dollar Index consolidates at its high.

 

RECAP– The market finished slightly lower on a limited trading range. Crude oil initially had a significant rally but gave up most of its gains in the afternoon to finish slightly higher. The US Dollar has been consolidating at its recent highs.

In-depth look of daily news at Briefing.com (CLICK HERE)

In-depth look at after hours movers (CLICK HERE)


Economic Calendar

Today

  • December 22: Core Durable Goods Orders m/m – Actual: 0.5%  Forecast: 0.2% Previous: 0.8%
    • A leading indicator that consumers that manufacturers are asked to produce more products.
  • December 22: Final GDP q/q – Actual: 3.5%  Forecast: 3.3% Previous: 3.2%
    • The final GDP figure doesn’t affect the forex or equity market as much as the preliminary or advance figures which come out ahead of time and generally have a bigger impact in trading. The final GDP number came in greater than expected.
  • December 22: Unemployment Claims – Actual: 275K  Forecast: 255K Previous: 254K
    • New unemployment claims came in significantly higher than expected, but still not at a level worth worrying about. New unemployment claims coming in below 300K is generally a good thing.

 

Upcoming Reports

  • Nothing major left.

 

FedWatch February 1 Rate Hike Probability for December 22: 4.0%  (View the probability chart here)


A Look At The S&P 500 Chart – KEY Levels

  • RSI is above 50.
  • On Balance Volume is above its moving average.
  • Not much to look at this week. This is very similar to the summer “lull” that we experienced in July and August.
  • The market is consolidating while trading in smaller ranges.


A Look Into the Heat Map

The market was generally bearish today led by Retailers.

MARKETS

(click on symbol for chart)
SPX –  Bullish
DOWBullish 
Nasdaq Bullish  
Russell  Bullish  

VIX – 11.43

 COMMODITIES

Oil (USO) –  Bullish
Ag (DBA) – Bearish
GLD –  Bearish – Gold is remaining in a bearish slump with the strengthening in the dollar.
SLV –  Bearish – Same as gold.

THE DOLLAR

UUP USD weighted ETF –  Bullish

 


SOLON’S TRADING THOUGHTS

This is a slow week as far as news and volume heading into Christmas weekend. I wouldn’t expect much to shake to market at this time and would expect a gentle fade higher due to the Santa Claus Rally. This is a horrible time for trading forex as there is too little volatility and trading volume in the currency market. Because of the lack of volume and movement, it is much harder to scalp or pick a good swing trade. This time of year would be best for non-directional theta trading as there is very little movement in the market. It’s a good time to load up on short straddles, short strangles, iron condors, calendar spreads, and even naked puts (remember that there is a slight bullish bias).

Volume is continuing to decrease making it harder to trade. One thing to be mindful of is that as volume decreases, the bid-ask spread increases on less liquid stock and options. This makes it much tougher to get quality fills and easier to lose money on slippage. Don’t be surprised if you are having difficulty entering trades or closing trades at your preferred fill price.

The market is trading in an increasingly tighter range with very little movement. This is hell for directional traders, but an absolute paradise for theta traders. The lack of movement is benefiting those who are theta positive. There is nothing like enjoying the holidays with a pocket full of theta. HAPPY HOLIDAYS ALL!


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