David Moenning Daily State of the Markets: 12/19
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Just Resting?
With only a handful of real trading days left in the year and history suggesting that the market should enjoy one more move higher before New Years Eve, the key question right now is, has the rally has stalled, or are the bulls just resting?
At the present time, stocks appear to be sputtering. Friday�s session marked the fourth day in a row of the now familiar pattern, which sees strength in the morning followed by weakness in the afternoon. Based on the fact that the market is overbought on both the short and intermediate-term time frames and that sentiment remains a tad too optimistic at the moment, normally we�d be looking for a pullback after this type of stalling action. But, with the holiday season upon us, it may not pay to get overly negative just yet.
Friday�s quadruple-witch session, where four types of options contracts expire, went pretty much according to plan. Volume spiked, volatility picked up a bit, and in the end, with the exception of some selling in the oil patch, not much changed.
Looking ahead, this week should get progressively quieter as we approach the holidays. However there is some work to be done first. On Tuesday, we will get reports on November�s PPI and Housing Starts. Then on Wednesday, the government will close the books on the third quarter with a final revision to Q3 GDP. Thursday brings reports on Personal Income and Spending and November�s Leading Economic Indicators. And finally, on Friday, we�ll get a peek at reports on the sales of Durable Goods and New Homes, as well as the University of Michigan�s Consumer Sentiment Index.
Turning to this morning, it looks like the bulls will once again try and advance the ball. Pfizer�s legal victory and another merger deal have stocks looking to open higher. Running through the rest of the morning indicators, oil is trading higher by $0.31 to $58.37; the yield on the 10-yr bond is relatively flat this morning at 4.46%; gold is climbing once again after a brief hiatus; and stock futures are moving higher (Dow +30, S&P +3.60, and NASDAQ +2.0).
So with stocks looking to advance at the open, the question of the day is if the bulls will be able to keep the ball rolling into the close this time, or will the consolidation phase continue?
Stocks "In Play" This Morning:
COP � Barron�s says company is best value in sector
PFE � Reiterated �Overweight� at JPM
CEG � Merging with FPL
CC � Guides �06 Sales Growth to 8-10% versus previous 5-8% range
MRK � Upgraded at Deutsche Bank
GOOG � Jeffries raises target to $475
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: none
To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
With only a handful of real trading days left in the year and history suggesting that the market should enjoy one more move higher before New Years Eve, the key question right now is, has the rally has stalled, or are the bulls just resting?
At the present time, stocks appear to be sputtering. Friday�s session marked the fourth day in a row of the now familiar pattern, which sees strength in the morning followed by weakness in the afternoon. Based on the fact that the market is overbought on both the short and intermediate-term time frames and that sentiment remains a tad too optimistic at the moment, normally we�d be looking for a pullback after this type of stalling action. But, with the holiday season upon us, it may not pay to get overly negative just yet.
Friday�s quadruple-witch session, where four types of options contracts expire, went pretty much according to plan. Volume spiked, volatility picked up a bit, and in the end, with the exception of some selling in the oil patch, not much changed.
Looking ahead, this week should get progressively quieter as we approach the holidays. However there is some work to be done first. On Tuesday, we will get reports on November�s PPI and Housing Starts. Then on Wednesday, the government will close the books on the third quarter with a final revision to Q3 GDP. Thursday brings reports on Personal Income and Spending and November�s Leading Economic Indicators. And finally, on Friday, we�ll get a peek at reports on the sales of Durable Goods and New Homes, as well as the University of Michigan�s Consumer Sentiment Index.
Turning to this morning, it looks like the bulls will once again try and advance the ball. Pfizer�s legal victory and another merger deal have stocks looking to open higher. Running through the rest of the morning indicators, oil is trading higher by $0.31 to $58.37; the yield on the 10-yr bond is relatively flat this morning at 4.46%; gold is climbing once again after a brief hiatus; and stock futures are moving higher (Dow +30, S&P +3.60, and NASDAQ +2.0).
So with stocks looking to advance at the open, the question of the day is if the bulls will be able to keep the ball rolling into the close this time, or will the consolidation phase continue?
Stocks "In Play" This Morning:
COP � Barron�s says company is best value in sector
PFE � Reiterated �Overweight� at JPM
CEG � Merging with FPL
CC � Guides �06 Sales Growth to 8-10% versus previous 5-8% range
MRK � Upgraded at Deutsche Bank
GOOG � Jeffries raises target to $475
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: none
To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
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