Friday was an indecisive day at the highs as the SPY closed just on the red side of flat, the DIA dead flat, and the QQQ posted a 0.40% gain.  This gave the QQQ another new all-time high close on the strength of its gap higher at the open.  Beyond the open, all three major indices printed Doji-type candles on the day.  The VXX did gain 1.21% but remains at historical lows as fear does not seem to exist in markets now. 

In US news this weekend Congress approved and President Trump signed the new spending bill to prevent a government shutdown.  This bill raised spending to $1.4 Trillion and in the process eliminated taxes used to pay for some of the ACA (Obamacare) programs.  It also avoids the possibility of another government shutdown until at least Sept. 30 2020.  (However, it’s hard to imagine anyone allowing a government shutdown a week before any election, let alone a Presidential election.)

In International news, China announced that next year it will reduce its tariffs on 144 new products (706 products were already in this program in 2019).  This means a total of 850 products will be charged import tariffs below the WTO “most-favored-nation” tariff rates.  Crucial to President Trump this will include Frozen Pork. However, it should be noted that we are talking only a 4% cut (from 12% to 8%).  So, the impact on demand is unknown.  However, it is another trade olive branch.

Monday’s major economic news is limited to Nov. Core Durable Goods (7:30 am) and Nov. New Home Sales (10 am).  There are no significant earnings reports slated for the entire week.

Overnight, Asian markets were mixed but mostly green.  In Europe, markets are also mixed at this point.  As of 7:30 am, U.S. futures are pointing toward a quarter-percent gap higher at the open.

The bulls seem to have cleared a path for Santa to continue his rally into year-end.  The Fed continues to quietly pump tens of billions of dollars of liquidity into markets daily through QE.  Meanwhile, a Phase-one Trade Deal seems done, earnings are out of the way and markets are ignoring impeachment.  So, at this point, it seems over-extension and the unknown are the only things to fear.  

With that said, remember that volumes will be light this week as most traders take time off for the holidays.  Continue to plan your trades, and trade your plans.  Don’t chase (there will be another trade, I promise), keep taking profits along the way, move your stops to protect yourself and wait for the trade to come to you. 

Ed

Sorry, but no Swing Trade Ideas this week. Trade smart, take profits along the way and trade your plan. Also, do not forget to check for upcoming earnings. Stocks we mention and talk about are not recommendations to buy or sell.

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