How Slow Can We Go?

 | Dec 22, 2011 | 4:10 PM EST
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We expect extremely slow but positive action around the holidays, and that is exactly what we got today. We gapped up slightly and meandered higher most of the day on about 3:1 positive breadth. Volume was the lightest for a full trading day this year.

Tomorrow the action is going to be even slower and the risk of choppiness even higher. Most folks will probably have better things to do, but if you look to daytrade for pennies, there may be some opportunities.

At this point, being bullish or bearish isn't particularly helpful. There is unlikely to be enough energy to support highly aggressive trades in either direction. The best approach is to stay open-minded and play the flow -- if you can find one.

One theme I'm going to be looking at more closely in the next week or so is the "tax-loss-selling bounce." Stocks hitting their lows of the year are likely being sold for tax losses and have the potential to rebound once the pressure subsides. It isn't a trading style I favor, but it may work during next week's slower environment.

Have a good evening. I'll see you tomorrow.

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