It is important to not read anything significant into the market action today. This is all about positioning, taxes and preparing for the new year. There is plenty of random movement and there should be a spike in volatility into the close.
As I've been saying for the past week or so I expect to see at least one bout of selling near the end of the year. There was a brief flurry after the gap up open and technology stocks, in particular, have done poorly, Breadth is slightly positive but we do have over 500 stocks hitting new 12-month highs which is a function of window dressing and making sure winners go out strongly so that money managers can maximize fees.
I have a bias toward raising cash today and starting the new year with a relatively blank slate but I am holding quite a few things that are in good position. One name that I like for next year that I added today is Ichor Holdings (ICHR) . It is chip related and has been under pressure with the group but has had superior earnings and looks promising to perk up into its report.
Fourth quarter earnings are going to be the next big trading catalyst and it wouldn't' be a bad thing from a technical standpoint if we had a dip first.
With the new year upon us it's always a good idea to reflect on our trading and what we will work on in the year ahead. By far the most important thing for any trader is mindset. If you don't have the right emotional state when you are trading it will undermine everything else you do.
Next week, I'll be listing some of my top picks for next year. I'd love to hear any suggestions from readers and will highlight some I find of interest.
If you are heading out I want to wish the best for you in the New Year.