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The Standard and Poors 500 index (SPX) closed today at 5997, up 59 points or 1.0%. SPX opened the week at 5782, gaining 3.7% for the week. Trading volume ran near the 50-day moving average (dma) all week.
VIX, the volatility index for the S&P 500 options, opened the week at 21.2% and closed today at 16.0%, down almost twenty five percent today.
I track the Russell 2000 index with the IWM ETF, which closed today at 224.4, up 3.3 points or 1.5% on the day. IWM opened the week at 220.7 for a weekly gain of 1.7%. IWM trading volume ran close to the 50 dma this week.
The NASDAQ Composite index closed today at 19,630, up 292 points or +1.5%. NASDAQ opened the week at 18,904, setting up a strong weekly gain of 3.8%. NASDAQ’s trading volume ran below the 50 dma most of the week, jumping up a bit today.
The last five trading days of December and the first two days of January have become known as the Santa Claus rally. Unfortunately, Santa didn’t come to Wall Street this year (down 0.7%).
The Stock Trader’s Almanac also tracks the first five days of January trading as a forecast for the year ahead. Positive gains for the first five days of January have preceded a positive year for the S&P 500 index 83% of the time. the first five days of January trading came in at +0.6% this year.
Now we wait for the January Barometer, which tracks the full month’s trading gain or loss. A positive January Barometer has predicted a positive S&P 500 gain with 73% accuracy.
I have been frustrated in my trading the markets since the highs in early December – many false starts and quick turnarounds, shaking me out of trades. This week's gains give me some hope for the new year.
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The Standard and Poors 500 index (SPX) closed today at 5942, up 74 points or 1.3%. SPX opened the week at 5921, gaining 0.4% for the week. Trading volume ran well below the 50-day moving average (dma) all week, typical of holiday markets.
VIX, the volatility index for the S&P 500 options, opened the week at 17.2% and closed today at 16.1%, down almost 10% today.
I track the Russell 2000 index with the IWM ETF, which closed today at 224.4, up 3.3 points or 1.5% on the day. IWM opened the week at 220.7 for a weekly gain of 1.7%. IWM trading volume ran close to the 50 dma this week.
The NASDAQ Composite index closed today at 19,622, up 341 points or 1.8%. NASDAQ opened the week at 19,460, setting up a modest weekly gain of 0.8%. NASDAQ’s trading volume ran above the 50 dma all week.
The Santa Claus rally was discovered by Yale Hirsch, the founder of the Stock Trader’s Almanac. The last five trading days of December and the first two days of January have averaged a positive 1.3% gain since 1969 through 2023. Unfortunately, Santa didn’t come to Wall Street this year (down 0.7%).
The Stock Trader’s Almanac also tracks the first five days of January trading as a forecast for the year ahead. Positive gains for the first five days of January have preceded a positive year for the S&P 500 index 83% of the time. After two days, SPX is up 0.7%.
The January Barometer tracks the full month’s trading gain or loss. A positive January Barometer has predicted a positive S&P 500 gain with 73% accuracy.
This market has been challenging to trade since the S&P 500 index hit its most recent high on December 6th. SPX traded lower almost immediately and then did a quick turnaround and almost recovered that previous high. But then the market gave it all back during the closing days of December. It has been very frustrating to see tentative gains and then watch them disappear just as quickly. Fortunately, our Apple spread survived the chaos with a nice gain.
Today’s positive market gains give me hope for a better new year.
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The Standard and Poors 500 index (SPX) closed today at 5,969, up 21 points or +0.4%. SPX opened the week at 5,874, gaining 1.6% for the week. Trading volume ran along the 50-day moving average (dma) all week.
VIX, the volatility index for the S&P 500 options, opened the week at 16.6% and closed today at 15.2%, slightly higher mid-week, but VIX declined today.
I track the Russell 2000 index with the IWM ETF, which closed today at 238.7, up four points or +1.9% on the day. IWM opened the week at 229.2 for a weekly gain of +4.1%. IWM led the broad market averages higher this week. IWM trading volume declined slightly as the week worn on.
The NASDAQ Composite index closed today at 19,004, up 61 points or
+0.2%. NASDAQ opened the week at 18,718, setting up a weekly gain of 1.5%. NASDAQ’s trading volume ran above the 50 dma all week except for Wednesday.
The markets reversed course from last week and traded higher this week. The S&P 500 stocks rose 1.6% this week; the NASDAQ Composite tacked on 1.5%. But the Russell 2000 index was running hard, up 4.1%. Russell’s gain is very encouraging as this index consists of smaller high beta stocks. These are the stocks the large funds turn to build their returns when they anticipate smooth sailing ahead. Conversely, they are the first stocks to be sold when the storm clouds are feared.
As you may recall from last week’s newsletter, I was seeing some signs of a possible recovery this week after the ugliness last week. However, I am a little scarred from the last couple of months of a very choppy market. I am focusing on the large cap tech stocks for a safe vehicle for this apparent bull run.
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The Standard and Poors 500 index (SPX) closed today at 6,090, up 15 points or +0.3%. SPX opened the week at 6,040, gaining 0.8% for the week. Trading volume ran along the 50-day moving average (dma) all week.
VIX, the volatility index for the S&P 500 options, opened the week at 14.1% and closed today at 12.8%, down almost 6% today.
I track the Russell 2000 index with the IWM ETF, which closed today at 238.9, up almost one point or +0.4% on the day. IWM opened the week at 242.2 for a weekly loss of -1.4%. IWM steadily moved lower this week. IWM trading volume ran below the 50 dma and declined slightly as the week worn on.
The NASDAQ Composite index closed today at 19,860, up 160 points or
+0.8%. NASDAQ opened the week at 19,255, setting up a nice weekly gain of 3.1%. NASDAQ’s trading volume ran above the 50 dma on Wednesday and Thursday but ran below average the balance of the week.
The blue chip markets, SPX and NASDAQ traded higher this week, but the small caps of the Russell 2000 index, as represented by IWM, declined steadily all week. Russell’s weekly loss may be a red flag for markets next week. My trading this week has been generally very positive, whether it be the selling calls and puts in the Conservative Income trading service or the SPX Zero DTE options trading service. In the personal account that mirrors the zero dte trading service, I gained $4,600 this week. Trading the zeros is intense and you must diligently manage the risk, but it can be quite lucrative.
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The Standard and Poors 500 index (SPX) closed today at 5,871, down 79 points or -1.3%. SPX opened the week at 6,009, losing 2.3% for the week. Trading volume spiked up on the day following the election and declined the rest of that week and into this week, although it spiked up above the 50-day moving average (dma) today.
VIX, the volatility index for the S&P 500 options, opened the week at 15.3% and declined steadily through Thursday’s close at 14.3%, but rose today to 15.1%.
I track the Russell 2000 index with the IWM ETF, which closed today at 228.5, down 3.5 points or -1.5% on the day. IWM opened the week at 240.5 for a weekly loss of -5.0%. IWM steadily declined every day this week. IWM trading volume ran at or above the 50 dma all week but spiked higher Tuesday and today.
The NASDAQ Composite index closed today at 18,680, down 428 points or -2.2%. NASDAQ opened the week at 19,355, setting up a substantial weekly loss of 3.5%. NASDAQ’s trading volume has run well above the 50 dma since the day of the election through today.
The markets traded higher after the election but cooled substantially this week. At least part of that decline belongs to FOMC chairman Powell’s comments. He said the Fed may not feel as pressured to reduce interest rates further this year since the economy is doing so well. Boston Fed President Collins piled on, saying a December rate cut is “not a done deal”. That took the steam out of this post-election bull run.
Weekly losses for the S&P 500 stocks, the NASDAQ Composite and the Russell 2000 index came in at -2.3%, -3.5% and -5.0%, respectively. In spite of these large declines, IBD’s recommended stock market exposure remains at 80-100% today.
This week was just one more example of how difficult it has been to trade this market. Just when you think a bullish trend has begun, the rug gets pulled out from under you. The S&P 500 index gapped lower at today’s opening and traded lower by 1.3%, with a large spike in trading volume. Could this be capitulation as many traders throw in the towel? NASDAQ also gapped open lower today and dropped 2.2% before finding support at its July high. NASDAQ’s trading volume has exceeded its 50 dma all week. The Russell 2000, as measured by the IWM, appeared to find support at its mid-October high concurrently with a spike in trading volume.
This gives me some hope for a recovery next week, but I may be grasping at straws.
