Day Traders Diary

12/28/18

The S&P 500 lost 0.1% on Friday in what was another whipsaw day of trading that saw the S&P 500 up as much 1.3% at its high and down as much as 0.6% at its low. The benchmark index finished a remarkably volatile, and history-setting, week with a gain of 2.9%.

The Dow Jones Industrial Average (-0.3%), the Nasdaq Composite (+0.1%), and the Russell 2000 (+0.5%) also experienced roller-coaster action on Friday and finished with weekly gains of 4.0%, 3.8%, and 3.6%, respectively.

Price action was relatively tame (for this week anyway) after the S&P 500 fumbled an early rally effort shortly after the start of trading. However, at around 1:30 p.m. ET, the benchmark index climbed from a loss of 0.2% to as high as 1.3% without any news to account for the move.

All sectors were up and all major indices were higher.

Nevertheless, stocks would retreat just as quickly as they had climbed with no news catalysts to account for the subsequent downturn either.  It was perhaps fitting that the S&P 500 ended the session close to where it started as that was an accurate reflection of the lack of conviction that characterized today's trading action.

Efforts to flatten out positions in front of the weekend, which could be a four-day weekend for many (the market is open December 31 and closed January 1) were likely responsible for some of the late-day selling.

The S&P 500 sectors finished mixed with energy (-0.9%) and materials (-0.6%) underperforming the broader market. Conversely, the consumer discretionary (+0.3%) and real estate (+0.2%) sectors outperformed.

U.S. Treasuries remained resilient to selling pressure with the 2-yr yield and 10-yr yield decreasing one basis point each to 2.52% and 2.74%, respectively. The U.S. Dollar Index lost 0.1% to 96.34.

Reviewing Friday's economic data, which included Pending Home Sales for November and the Chicago PMI for December:

• Pending Home Sales decreased 0.7% in November (Briefing.com consensus +0.5%). Today's reading follows an unrevised 2.6% decrease in October.
• The MNI Chicago Business Barometer, colloquially known as the Chicago PMI, decreased to 65.4 in December from 66.4 in November. The December pullback took place after the Index soared by nearly eight points in November.
  • The key takeaway from the report is that the overall reading remained elevated thanks to strong order backlogs and an increase in the Production Index.

Investors will not receive any notable economic data on Monday, which will be a full day of trading on Wall Street.

• Nasdaq Composite -4.6% YTD
• Dow Jones Industrial Average -6.7% YTD
• S&P 500 -7.0% YTD
• Russell 2000 -12.9% YTD

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  • Headlines provided by Briefing.com