14 TRADING DAYS LEFT IN 2012

MrTopStep.com

Did you know that there are only 14 trading days left in the year? It’s not just Congress that is about to go on vacation, so is everyone else! With 4 days left on the congressional calendar and the CME Group closing early on Monday, Dec. 24, and closed all day Tuesday, Dec. 25, for Christmas Day, there is not much time left in the year. The CME Group will reopen on Dec. 26, then be closed Monday, Dec. 31 and Tuesday, Jan. 1 for New Year’s. November went by quickly and December is on an even faster track.

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After racking up some early big gains in the beginning of 2012, the markets pulled back and started going up again. Net changes: As of Friday's close the Dow is up 7.67% YTD, the S&P 500 is up 12.76%, the NASDAQ is up 14.31%, the Russell is up 10.98% and the CBOE VIX is down 32.14%. On Friday, Nov. 30, the SPZ future closed at 1414.40, and last Friday, Dec. 7, the SPZ closed at 1416.00. From Friday to Friday the SPZ gained 1.6 handles. From Wednesday’s 1397.00 to last Friday's high, the SPZ is up 19 handles.

Last week the S&P futures closed higher 3 days in a row.
Monday, Dec. 3 SPZ  -7.3 handles
Tuesday, Dec. 4 SPZ -1.6 handles
Wednesday, Dec. 5 SPZ +2.8 handles (1397.00 low)
Thursday, Dec. 6 SPZ +4.7 handles
Friday, Dec. 7 SPZ +3.0 handles

Investors have moved beyond the election. While the markets have seen some positive macroeconomic data, the response to the news has been overshadowed by the government’s seeming stalemate on the fiscal cliff. Despite the inaction, the Dow closed up 1% last week for its third straight week of gains. The S&P closed up 0.13% last week, also up 3 weeks in a row, for a positive gain of 4.3%. The .618 retracement from last week’s 1398.25 low comes in at 1423.50. As more people start cutting back into the close of the year, we wonder if the current grind is starting to wear out ...
  
Danny Riley is a 34-year veteran of the trading floor. He has helped run one of the largest S&P desks on the floor of the CME Group since 1985.
 
Our view:
Mondays have been bad for the SPZ. What used to be our favored buy day has turned into a favored sell day. Why did this happen? It happened because there is just not enough volume to keep the markets up all week. Sell early in the week and buy ’em back later in the week, that’s the pattern. That said, we still have to be on guard for some breaking news headlines about the fiscal cliff. We lean to selling the early rally, then buying weakness. As always, keep an eye on the 10-handle rule and please use stops.

Today’s data:

  • It’s 7:15 a.m. and the SPZ is trading 1413.80, down 2.2 handles; crude is up 70 cents at 86.63; and the euro is down 2 pips at 1.2926.
  • In Asia 7 out of 11 markets closed higher (Shanghai Comp + 0.39%).
  • In Europe 8 out of 12 markets are trading lower (CAC -0.55%, DAX -0.53%).
  • Today’s headline: “S&P 500 Futures Seen Lower; Monti’s Exit Looms.”
  • Economic calendar: Today: McDonald's November sales; earnings from Teavana. TUESDAY: NFIB small biz optimism index, international trade, wholesale trade, 3-yr note auction, FOMC mtg begins; earnings from Dollar General. WEDNESDAY: Weekly mortgage apps, import/export prices, oil inventories, FOMC mtg announcement, 10-yr note auction, FOMC forecasts, Bernanke press conference, 3M 2012 outlook mtg, OPEC mtg; earnings from Costco. THURSDAY: Jobless claims, PPI, retail sales, business inventories, 30-yr bond auction; earnings from Hovnanian, Pier 1 Imports, Adobe Systems. FRIDAY: CPI, industrial production, Facebook lockup lifts
  • Today: Globex volume: 1.77mil ESZ and 10.7k SPZ trade
  • Fair value: S&P -2.75, NASDAQ -8

MrTopStep Closing Print Video:  http://www.mrtopstep.com/closing-print-12-7-2012/

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DISCLAIMER: The information and data in the following report(s) were obtained from sources considered reliable. Opinions, market data, and recommendations are subject to change at any time. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any commodities or securities. MrTopStep, its officers, directors and its contributors may, in the normal course of business, have position(s) which may or may not agree with the opinions expressed in this report.

 
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