From the looks of things on the first day of trading after Christmas, there may not be enough traders/desire/interest to get the Dow industrials to 20,000 by year end.
Though it has little to do with a long-term strategy, hitting that level wouldn’t be such a bad thing before we head into 2017. Simply, a box to check, let’s say.
Yet there may not be enough gumption no matter how close the target stands. “When the reality of no stimulus catches up with the perception of stimulus, plus the Fed tightening, that’s the train wreck. Either we’re going to have a recession or a stock market correction,” Jim Rickards, editor of financial newsletter Strategic Intelligence told CNBC in a post-Christmas interview.
Our call of the day is sticking to the positive side, however, with a technical signal that some say could set stocks up for more gains in 2017.
It’s referred to as a “bullish outside year,” which simply means that the highs and lows for this year have been both outside the range they stuck to in 2015. (See this mention by Reformed Broker’s Josh Brown over the summer).
Jonathan Krinsky, chief market technician at MKM Partners, discussed the move in a note to clients, and shows just what that looks like in this chart:
“Assuming the S&P 500
can close the year above 2135, it would be just the third ‘bullish outside year’ since 1928, says Krinsky.
And this is where he says it could look positive for the year ahead. “While a sample size of two is insufficient from which to draw many conclusions, the two prior bullish engulfing years (’35 and ‘82) were followed by yearly gains of ~28% and ~17%, respectively,” says Krinsky.
Here’s one more for the bulls:
Here’s why the current bull market could last EVEN longer.
— StockTwits (@StockTwits) December 26, 2016
Key market gauges
No surprise to see futures on the Dow
and S&P 500
off to a slow start. The Dow
logged its seventh straight weekly gain in a quiet preholiday session on Friday, but moved less than 0.1%, leaving the 20,000 milestone about 20 points off. The S&P 500 finished up 0.1%.
And Seattle Genetics
is down 13% after the FDA put holds on several of its early-stage clinical trials.
In case you missed the annual “Holiday tree of returns” from LPL Research’s Ryan Detrick, here it is:
Detrick says it’s a “nice yearly reminder that returns tend to look like a normal distribution curve,” but that it’s also eye-opening because it shows strong equity returns during bonafide recession years.
“Of course, most of the largest yearly equity losses do take place during a recession, but a recession by itself isn’t a sure thing for lower equity prices. These are important reminders each year,” he says.
Here’s another worthwhile chart:
— jeroen blokland (@jsblokland) December 27, 2016
Over 100 million — that’s how many records pop star George Michael, who died over the Christmas holiday at the age of 53, sold worldwide.
The world was gloomy before I won – there was no hope. Now the market is up nearly 10% and Christmas spending is over a trillion dollars!
— Donald J. Trump (@realDonaldTrump) December 26, 2016
That was part of a post-Christmas tweetstorm by President-elect Donald Trump, who tapped on his charitable giving and swatted away President Barack Obama’s claim (in this CNN interview) that he would have beat the billionaire in the November election.
Among the replies to the above tweet, was a tweet-by-tweet retelling of “How the Grinch Stole Christmas.”
Starving Venezuela teen risks death to eat, and loses
Student’s Nazi-themed parade in Taiwan goes down as you’d expect
Mall fights reported across the country the day after Christmas
A lesson on viral invitations as thousands crash Mexican girl’s quinceañera
Pennsylvania cancer patient wins a year’s worth of pizza, gives it away
Upper-class men get the best law jobs in the country
This woman totally nailed the perfect gift for her boyfriend:
For Christmas I got an artist to draw my boyfriends anime characters for a story hes been working on since he was 16 save to say he loved it pic.twitter.com/NUNaeiNXtn
— Pudge Princess✨ (@Liltwistout) December 25, 2016
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