Anything That Moves

Random Thoughts

I almost didn’t do a column today because you really hate to read too much into a holiday shortened trading session.

The Ps (S&P 500) ended in flatsville. This action keeps them right all-time highs. Not much to report here.

The Quack (Nasdaq) ended a smidge higher. Ideally, I’d like to see it bust past 4800 to get back to multi-year highs/its November peak.

The Rusty (IWM) ended a tad lower. So far, its breakout remains intact. Ideally, I’d like to see it bust past 120 to get back to all-time highs.

There was one notable development on Wednesday-and probably the only reason I decided to write a column today. Biotech shares bounced back. It wasn’t a 5% “do over,” but +1 ¾% is better than a poke in the eye. This action, so far, suggests that it is not going to be a rout lower. See Wednesday’s column for more on this.

The Utilities did manage to break out decisively. This is similar to what we saw recently in Real Estate (REITS). I’m not a big fan of these sleepy areas but if they continue to wake up, I might be forced to reconsider. At a party recently, someone asked me what I traded. I began to formulate my well thought answer into a lengthy explanation about efficient vs. inefficient markets and was going use examples of bigger cap vs. smaller cap issues. In the middle of collecting these thoughts I just blurted out “anything that moves.” Maybe I was anxious to fix my plate (likely) but for some reason my lengthy diatribe was reduced to 3 words.

So, if it moves, trade it. If it doesn’t leave it alone.

Speaking of movement, I’m not sure if we’ll see a lot of movement today. Post Christmas trading like any other trading around the holidays can be thin and choppy.

So what do we do? As always, the rule is that if you really like a setup, then take it, regardless of whether the trading is around the holidays or not. Since it is the holidays, just make sure you really like the setup. I’m seeing a few Energies that look poised to make a new leg lower. I did see gas with a $1 handle ($1.98) in my holiday travels. Other than issues like the Energies that can trade contra to the overall market, I would not fight the tape. I’m not seeing a lot of buy setups at this juncture. This is probably because the indices are hovering near new highs and the methodology requires a pullback. For the most part, you might just want to watch and not act. If there’s nothing to do, then spend some time with (or avoiding) your family. I’m half kidding.

Best of luck with your trading today!

Dave