Dasher and Dancer too pooped to participate? Pre-holiday stock volume contracts on Wall Street as traders sell off stocks in sectors that popped post-Nov. 8.
WASHINGTON, December 22, 2016 – As we suspected it would, stock trading volume has been gradually contracting as Christmas Weekend approaches, and along with that shrinking volume have come shrinking stock prices in many sectors.
The financials in particular are backing off a bit from their spectacular post-election rally, which was buttressed last week by the FOMC’s 0.25 percent increase in interest rates.
Silliness and triviality mars trading action in holiday-influenced markets. Many players will be out of the game now until after New Year’s Day 2017, leaving the field to those wild and crazy guys (and/or computers) running high-frequency trading (HFT) operations, so anything can and will happen to stocks between now and then, making this something of a treacherous time to put on new positions.
We’ve done a little fiddling in our portfolios (more on this in our companion column), some good, some bad. But aside from this, we won’t be having much useful to say, aside from relevant surprise tidbits, probably until January 2, 2017. But stay tuned. With ISIS making its usual threats (and occasionally delivering on them or claiming to), exogenous events could jump up and surprise us, perhaps requiring emergency portfolio repairs.
But aside from this, bets and/or investments made in low-volume markets will often turn on you—and us—so we’ll remain cautious until the New Year.
It’s a bit disappointing, this… Like others in the financial punditocracy, we were hoping to see the Dow close atop that magical 20,000 barrier. But now that Santa’s elves (and Amazon.com warehouse employees) are working 24/7 on Christmas deliveries, that mind-boggling but otherwise meaningless number may become a 2017 event if it happens at all.
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