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So where's Santa? That jolly, bearded guy should be flying around the market right now helping it to finish out the year on a high note. Instead, the major indices just completed their second straight session of losses. It would take a Herculean effort now for the Dow to hit 20,000 in 2016, especially since volume is so low. The S&P was down 0.03% to 2249.3 and the Dow decreased 0.07% to 19,819.8. The NASDAQ was off 0.12% to 5432.1. These losses were much less than yesterday.
But New Year's is a time to reflect on the past and hope for the future. On both fronts, investors should be feeling pretty good right now. The major indices are up big this year, which is a nice turnaround from the truly alarming start to 2016. And the economy's fundamentals stretching forward are solid as evidenced by several recent pieces of data and the overall optimistic tone of the editors.
In the portfolios, Surprise Trader finally got completely out of its volatile Nvidia position, and enjoyed a gain of more than 50%. This comes after two earlier returns of more than 20% each on the original position. The only other bit of activity was Large-Cap Trader adding to two existing positions. Learn all about this below, along with plenty of analysis from the services.
Nvidia Does It Again for Surprise Trader
→ Another volatile session for Nvidia (NVDA) tripped the Surprise Trader’s stop on Thursday, prompting the portfolio to sell its remaining shares and putting a cap on one of its most lucrative positions. Today’s sell brought an impressive gain of 54%. Eric had already taken profits on the original NVDA position twice in the past couple of months for gains of 22% and 25%.
Today's Portfolio Highlights:
• The Large-Cap Trader is making a modest change. Its original strategy planned to add four stocks with 2% allocations each. (This was after it bought the first 11 names with 8% allocations.) Instead, John decided to add 2% more to his previous 2% weight positions of Teradyne (TER) and Commscope (COMM), thereby giving them each 4% weight. This also leaves a 4% spot for one more pick. “These 4% overall portfolio positions are our ‘relievers’ versus our earlier ‘starters’ at 8%,” said the editor. Read more about these new moves in the complete commentary. Be prepared for some “sell harvesting” of those initial 8% positions coming up.
• "The lack of volume over the holidays has been disappointing and it’s the main reason we can’t get the Santa Claus push we were looking for. Rebalancing has also held down markets and today we continued to see a bid for bonds and an offer in equities.
"It's normal to see a slowdown over the holiday season, but given we were so close to Dow 20k, the thought was that volume would stay elevated with a push above that level. However, we remain 180 points away with only one more trading day left," said Jeremy in Zacks Counterstrike.
• "Right now the stock market is sleepy…listless…boring.
"That is a departure from the usual holiday sessions where stocks glide higher on Santa’s sleigh. Probably the difference this year is the ton of profit that was made immediately after the election. Investors are just getting a jump start on some of the corrective actions that would normally have taken place in the first quarter of the New Year.
"Sooner or later the market will ride higher thanks to an expanding economy and still attractive earnings yield valuation. No need to guess exactly when that will happen. Let’s just stay long in preparation for that most likely outcome," said Steve in Reitmeister Trading Alert.
• "Think back to the beginning of this year.
"For the month of January, The Dow finished down 5.5% while the NASDAQ fell 8%. The selling continued in February. It was so bad that at one point, the small caps were down 16% on the year.
"Given the severity of the sell off, there were few who would have predicted how this year would end. In fact, at the time of the sell off the "experts" were mostly saying the year was probably lost to investors.
"But with one trading day left on the year, here is how we'll end up:
"S&P 500: up 10%
Dow Industrials: Up 13.7%
NASDAQ: up 8.3%
Russell 2000: up 19.5%
"If you managed to buy the small caps on their darkest day in February, you would be up 35.5%," said Tracey in Value Investor.
Until Tomorrow,
Jim Giaquinto
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