Wall Street Eyes the Calendar as Santa Checks His List
As two mileposts dictate the action, I am primarily looking at stocks with these characteristics.
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The market action was slow on Monday morning, with small-caps IWM lagging badly, but the action improved as the day progressed, with a little holiday spirit taking hold. Breadth was negative, and there were 320 new 12-month lows to 100 new highs, but the Magnificent Seven MAGS outperformed again with a 1.4% gain, and the S&P 500 Equal Weight Index had its second day of gains for the first time since November.
Typically, after a day like Monday, we’d be looking at upcoming economic and news catalysts for guidance, but we are at that unusual time of the year when the big event is the holidays and the end of the year. Those two mileposts will determine the action more than fundamentals or macro-economics.
There is a half-session on Tuesday, and the market closes at 1 p.m. ET. Typically, volume is very light, but the big issue is whether market participants will start to anticipate a Santa Claus rally. There were some signs of that inclination on Monday afternoon, but more aggressive buyers are still waiting for the action to pick up some momentum. The mixed breadth was a negative, but the strong finish was a positive.
I am primarily looking at stocks that have traded poorly recently and may be tax loss-selling candidates. If market conditions improve, they should see the tax-selling pressure subside later this week and some bounce action build.
Have a good evening. I’ll see you Tuesday.
At the time of publication, Rev Shark had no positions in any securities mentioned.
