Unlike Christmas Eve in 2018 when the S&P 500 plunged 2.6%, it was an uneventful day for the market this time. There was some mild profit-taking and the pockets of momentum contracted a bit, but overall it wasn't bad action.
Breadth was negative at around three gainers to every four losers and the number of new 12-month highs fell sharply to around 330. However, that is still impressive for a low-volume, half-day of trading. While my list of 10% movers was down to a couple of dozen, there still were some big moving SPACs such as RMG Acquisition Corp. (RMG) .
There was not any major change in market character, although there sure seems to be a big jump in the number of folks anticipating a sharp turn. There are still plenty of hungry dip buyers to provide support, although there is a high level of volatility in some of the big movers that is shaking out traders that are playing too tight.
Next week is when the much-talked about "Santa Claus rally" is supposed to occur but keep in mind that seasonality of that sort is a tendency and not a certainty. At the end of the year, market players make a variety of moves that have little to do with the fundamentals of the stocks they hold and this can cause some craziness. Typically, we have at least one bout of intense selling in the final days of the year so don't be too complacent.
Trading will be thinner next week but typically sentiment is upbeat and that offers a good trading environment. You may want to keep time frames shorter and if you stay alert there should be good opportunities.
I want to wish everyone a Merry Christmas and Happy Holidays. We have had a great run lately and it is likely to be more challenging again soon, but I'm confident that we can navigate whatever this market throws at us. Celebrate the blessings we've received and stay positive and optimistic.
Have a great holiday. I will see you on Monday.