Year-End 'Games' Are Making Things Extremely Difficult for Traders

With only two days of trading left in the year, the market looked grim at the open on Monday morning. Many market participants had given up on the idea of a Santa Claus rally and anticipated that profit-taking and tax-selling would dominate the action. However, some brave dip buyers bought the open and did well. The indexes still had sizable losses, but they did not close at the lows of the day, which is a positive.

Breadth was more than two to one negative, but there was a fair amount of speculative trading in single-digit small-cap stocks. The Russell Microcap Index fund ETF finished down 0.5% versus a loss of 1.87% for the Magnificent Seven MAGS. The only Mag 7 stock that managed positive action was Nvidia NVDA, which has recently been moving counter to the group. Bitcoin IBIT bounced back, but it was still a tough day for the sector.

This is extremely difficult action to trade and won’t be any easier on Tuesday, which is the last trading day of 2024. At this point, most of the movement has nothing to do with fundamentals or charts. It is all about raising cash, adjusting portfolios, and positioning for next year. Tax-loss selling is now mostly over, but there will be some last-minute window-dressing games in the final trades of the year.

Have a good evening. I’ll see you Tuesday.

At the time of publication, Rev Shark was ong NVDA and IBIT.