9 Minute Read

Market Recap December 27, 2016

December 27, 2016

By

MR
MARKET SNAPSHOT
Dow19945.17+11.23(0.06%)
Nasdaq5487.44+24.75(0.45%)
SP 5002268.88+5.09(0.22%)
10-yr Note-5/322.559
NYSEAdv 1819Dec 1137Vol 589.9 mln
NasdaqAdv 1827Dec 1133Vol 1.12 bln

IN THE NEWS HIGHLIGHTS:

  • US markets resume trading following a 3-day holiday weekend.
  • Expect low volume this week.
  • Crude oil rallied on the day.
  • U.S. Dollar Index continues to consolidate.

 

RECAP– The market nearly put in new highs today before selling off into the close. Crude oil rallied on the day and is threatening to break out. The US Dollar continues to consolidate.

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

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


Economic Calendar

Today

  • December 27: CB Consumer Confidence – Actual: 113.7  Forecast: 108.9 Previous: 109.4
    • Consumer Confidence is the leading indicator for consumer spending.

 

Upcoming Reports

  • December 29: Unemployment Claims
  • December 29: Crude Oil Inventories

 

FedWatch February 1 Rate Hike Probability for December 27: 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.
  • Same as last week, 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.
  • We should continue to expect low volume (note the significant dropoff in the past week).
  • Market looks overextended, having gone nearly two months of exceptional bullishness without a significant correction.


A Look Into the Heat Map

The market was generally bullish today, but not very convincing.

MARKETS

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

VIX – 11.99

 COMMODITIES

Oil (USO) –  Bullish – Oil looks strong and in breakout territory.
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 should be another slow week in the market with very low volume. Trading directionally will again be difficult. With the lack of volatility and movement, this is a great environment for theta traders and options sellers. The lack of movement in the market while theta is decaying benefits those trades. Reflecting upon last year, this was a good week to take profits on trades where you could get them as volatility is shrinking and will not likely get lower. Also, if I’m looking to get into new trades, I’m looking more to debit spreads and calendars as volatility will only pick up in the beginning of the year as institutional traders come back into the market, thus benefiting those trades.


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