..or just good?
The worst possible scenario on an expected low volume day is a rash of negative headlines. Stocks/ Sectors plummet as buyers are nowhere in sight and sellers will relieve themselves of their shares almost at any price. At end of the day, we simply got exaggerated moves to the downside because of the low volume. If it wasn't for the fact we don't want to carry many different positions over the holidays, it might prove to have been an excellent opportunity to open positions in beat up sectors like the Shales (downgrade sec, by RJ). The negative headlines running the day...very negative data regarding Asian trade metrics, a negative outlook on Alcoa and a bunch of downgrades to the commodity/ industrial sectors. Throw in an astounding Oil price, a declining Dry Bulk Index (3rd day in a row) and you have what looks like a fallout occurring from the initial excitement of the US/ China initiatives of spending. Oh yeah, commercial real estate headlines also weighted in on the the market, particularly on life insurers because of portfolio concerns. The short covering here lately (eg,HIG) has abated on new concerns, clearly. Bank/ brokers space also felt this and besides JPM, most were down 3-7%. Toss in a Tech mess led by AAPL, more Retail, Auto bailout concerns and you have to say we were lucky to come out 60 and 16 points down on the DJIA/SPX, respectively. We were simply down across the board and final tallies in the major indices are looking quite lucky to escape bigger overall declines.
Speaking of the SPX, we bounced off support at 855 and resistance is now the 50ma at about 900.
If there is an opportunity till the end of the year, we think it may come from the 'sale' of the commodity/ industrial equities and so we'd watch this space more closely than any other.
Markets close at 1pm Wednesday and our next Journal will lead into Friday's trading day. Considering how fast we recovered late in the day, we're still going to be around just in case this week ain't a complete wash on the trading front. Anything is possible.
Happy Holidays to all our friends and your families.
D&J