It was a mixed week for US equity indexes, with net weekly changes ranging from -1.9% (Nasdaq comp'), -1.3% (Transports), -0.2% (SPX), +0.01% (R2K), +0.9% (Dow), to +1.1% (NYSE comp').
Lets take our regular look at six of the main US indexes
sp'500
Nasdaq comp'
Dow
R2K
NYSE comp'
Trans
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Summary
Three US equity indexes were net higher, with three net lower.
The Nasdaq comp' lead the way down, whilst the NYSE comp' was the most resilient.
Last week's bearish engulfing candles played out in all six indexes, even though three indexes settled net higher for the week.
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Looking ahead
It will be a short four day trading week, with Monday CLOSED in observance of Christmas Day.
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Earnings: none
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Econ-data/events
M - *CLOSED*
T - Case-Shiller HPI, FHFA HPI
W - Pending home sales
T - Weekly jobs, EIA Pet' & NG reports.
F - Chicago PMI
As Friday is the last trading day of the year, I would expect very dynamic price action on extremely high vol'.
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| Christmas Eve |
Final note
With last week's bearish engulfing candles playing out, its to be seen as a net bearish week.
Many are naturally looking ahead, with a focus on what the fed will do. Yet there are a great many other important variables, of which most choose to be in denial about. Whether its China/Taiwan, the increasingly loud war drums between the west and Russia, or the intentional reduction in global food supply. The Fed simply aren't the be-all of the global capital markets.
If a major war breaks out, do you think anyone will care if the Fed raise or lower rates by 25bps? The mainstream remain bizarrely complacent...
... as typified by the Tom Lee...
Whilst Lee is calling for a collapse in volatility, yours truly will comfortably take the other side of that trade. I have to expect a surge in volatility, with increasingly wild equity price action. Q4 earnings - due to begin around Jan'12th won't be pretty, and then Mr Market is going to have to price in a 'difficult' 2023.
Further... virtually no one is considering a secondary multi-month up wave in inflation. How do you think the market will react if headline CPI is back >8% by mid year? Even if inflation broadly cools to 4%... that is another 4% that the consumer loses in purchasing power.
The cheerleaders can tout all they want about how inflation will be lower, but its just another baseless 'everything will be fine' narrative, as much as it was for 'inflation is transitory'. They are broadly clueless, and to be derided as such.
2022 was a tough year. It should be clear... 2023 will be tougher.
Christmas offers, see: https://www.tradingsunset.com
Have a good weekend
