Monday, December 19, 2011

Lack of Catalysts To Drive Markets Higher

The markets were higher in early trading, but have since faded as a lack of any significant catalysts exist today to help drive markets higher. There have been very few economic or corporate announcements. News out of Europe was also quiet over the weekend, with some continued chatter about whether the ECB will step up its bond purchases.

The big news even was the death of Kim Jong Il in N. Korea, and what that might mean for the transition of leadership in that country. Asian markets were down across the board overnight amid the uncertainty.

Financials have led the reversal lower this morning after the Basel committee said they would like higher capital requirements for the banks. Financials are down the most so far today, while healthcare stocks are up the most.

The dollar is up a bit today, which is weighing on commodities slightly. Oil prices are flattish near $93.60 and gold prices are also a bit lower near $1595.

The 10-year yield continues to languish down around 1.84%; and the VIX is currently up 3% right to the 25.0 level.

Trading comment: The major indexes were down an average of 3% last week, and the market is now back into oversold territory. I expect choppy trading to continue in this news driven market, but I think this week's trading will have an upward bias as people look for a potential Santa Claus rally to surface. Trading will likely continue to be light as many folks have simply called it a year and closed up their trading books. The rest of us will continue looking for profitable trades in investments on a daily basis.


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