The indexes were mixed with the Nasdaq the only winner and the rest of the indexes losing ground.
2017 is only three days old and the markets are having trouble focusing on a direction. However, there was a slight bullish bias thanks to the new high on the Nasdaq Composite. The Nasdaq only exceeded the old high by 50 cents so it could also be seen as a dead stop at resistance. The rally was totally driven by the FANG stocks with Amazon gaining a whopping $24. Nasdaq decliners beat advancers 1,642 to 1,075 so the gains were definitely just in the big caps.
We still have the same setup we had last week with the indexes stalling right at resistance and not being able to push through to begin a new leg higher. Every day produces a new round of earnings warnings suggesting the Q4 earnings may not live up to expectations. Eventually that will matter to investors.
There was a definite souring of momentum on the Dow stocks. Financials weakened, Travelers, Home Depot, Exxon and some of the recent leaders began to lose ground.
I know it is boring not to have any new plays but we need to be patient for one more day. If the market does not pick a direction on Friday, I will be surprised. Shorts waiting for a January decline my get tired of waiting and decide to cover rather than face weekend event risk. Longs may feel the same way and get tired of waiting and decide the rally is over. Friday's tend to be decision day for traders. Let's wait one more day and even if we do not get a direction I will hold my nose and add some new plays in the weekend newsletter.
NEW BULLISH Plays
No New Bullish Plays
NEW BEARISH Plays
No New Bearish Plays