FRIDAY'S MARKET WRAP-UP
Market Snapshot for December 22, 2011 (1:31 a.m. ET, Dec. 27):
Closing Prices: DOW 12,294.00 (+124.35, +1.02%), S&P 500 1,265.33 (+11.33, +0.9%), NASDAQ 2,618.64 (+19.19, +0.74%), Nikkei 225 8,440.56 (-38.78, -0.46%), DAX 5,878.93 (+26.75, +0.46%), FTSE 5,512.70 (+55.73, +1.02%)
OIL 99.42, GOLD 1,597.40, SILVER 28.91
EURO 1.3069, YEN 77.89, BRITISH POUND 1.5636, U.S. DOLLAR INDEX 80.235
Markets Teeter on the Edge of a Positive Year
This year has been a rather uneventful one for the broad market. Most of it has been spent in a trading range with the indices constantly flirting with positive and negative territory. While the first half of the year was spent mainly in the black with retests of the zone of the year's lows, the selloff in late July and the start of August shifted the balance of power to the bears and the tables turned. Ever since, the market has been struggling to recover and finish the year in the black. And it may still succeed.
Dow Jones Industrial Average (Figure 1)
This past week was a light one for trade as market participants began to dwindle thanks to the approaching holiday, but it was nevertheless a positive one as market players appeared to be entering the end of the year in good spirits despite the angst they experienced. Or perhaps they just wanted to give things a little boost to be able to show at least some gain on their books. Either way, the week ended higher by 3.6% for the Dow Jones Ind. Average ($DJI), 3.74% for the S&P 500 ($SPX), and 2.48% for the Nasdaq Composite ($COMPX). All 10 of the S&P's industry groups were positive. For the year-to-date, the Dow is up 6.19%, the S&P 500 is up 0.61%, and the Nasdaq is down 1.29%, and the Russell 2000 is down 4.59%. In other markets: crude oil is up 9.08%, gold is up 12.99%, the U.S. Dollar Index is up 1.2%, and the 10-year Treasury is down 38.58% year-to-date.
S&P 500 (Figure 2)
Friday's Index Wrap-up
The Dow Jones Industrial Average ($DJI) ended the day on Friday with a gain of 61.91 points, or 0.51%, and closed at 12,169.65. Twenty-eight of the Dow's thirty index components ended the session in the black. The strongest were Bank of America (BAC) (+2.38%), Disney (DIS) (+2.03%), and Cisco Systems (CSCO) (+1.88%). The two losers were Alcoa (AA) (-0.56%) and Boeing (BA) (-0.43%).
The S&P 500 ($SPX) finished the session with a gain of 10.28 points, or 0.83%, and closed at 1,254.00. The strongest individual percentage performers in the index were TripAdvisor (TRIP) (+6.07%), Walgreen Co. (WAG) (+4.19%), and International Game Tech. (IGT) (+3.70%). The weakest were Mead Johnson Nutrition (MJN) (-5.05%), MetroPCS Communications (PCS) (-2.97%), and LSI Corp. (LSI) (-2.48%).
The Nasdaq Composite ($COMPX) ended the session higher by 21.48 points, or 0.83%, on Friday and it closed at 2,599.45. The top index components in the Nasdaq-100 ($NDX) were Fossil Inc. (FOSL) (+3.58%), Expedia Inc. (EXPE) (+3.05%), and Applied Materials (AMAT) (+2.75%). The weakest were CTrip (CTRP) (-2.85%), Netflix (NFLX) (-1.65%), and Marvell Tech. (-1.19%).
Nasdaq Composite (Figure 3)
This shortened trading week will be even lighter than last with volume not returning in full force until the new year. There is very little on the docket data-wise to stir things up. Today brings with it the Case-Shiller 20-city Home Price Index for October and December's Consumer Confidence report. Also out this week are the National Realtors' pending-home-sales report on Thursday and the Chicago Purchasing Managers Index report for December on Friday.
The market is currently dealing with resistance from the earlier highs this year and a slow-down in momentum as that level approached has put a damper on last week's rally. It will make it more difficult to push sharply to higher highs out of the daily trading range that the market has been stuck in over the past several months, but the market will be hesitant to give up its meager gains. The market does tend to hold support and resistance levels and technical patterns extremely well when volume is on the light side, and while the session ahead of a holiday is pretty tame, market moves are often amplified in light-volume trade.
Unless otherwise stated, the index action described in this article relates to the E-mini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.
Toni Hansen is president and co-founder of the Bastiat Group Inc., DBA Trading From Main Street. Toni is one of the most respected technical analysts and traders in the industry. She has been trading and educating new traders, money managers, professional market analysts and traders throughout the boom and bust of the last decade. She has worked in conjunction with some of the world's top financial exchanges. Learn more about Toni Hansen and the educational services she provides through her website at http://www.tonihansen.com.