WASHINGTON, November 24, 2014 – Pretty much everyone including the Maven expects thin, rudderless trading in stocks this weekend, compounded by the low-level overhang of headline risk with some nasty potential. The executive amnesty flap initiated by Emperor Barack I is still stewing about in the lame-duck Congress, the incoming Congress and in the majority of the American public’s minds according to weekend polling on the issue.
Additionally, the usual boogie men are hovering in the background—namely ISIS (will they behead someone else or blow up a trainload of Thanksgiving travelers?); Iran (blew the deadline for “negotiations,” but hey, who cares?); OPEC (will they or won’t they cut production to protect pricing?); Ferguson (let’s destroy all businesses that cater to minorities just to prove a point?); and the latest disquieting occurrence: the sack resignation of hapless Defense Secretary Hagel, just hitting the headlines.
A generally off-the-reservation Republican, the ex-Senator was hired by Obamanation to supervise the drawdown of American troops in the Middle East and the continuing evisceration of the American military, the better to find more tax money to redistribute to low information Democrat-voting drones.
Unfortunately for Hagel, the ongoing Obama foreign policy “reset” has gone so disastrously that he likely needs a new guy, hopefully with some street cred, to shore up a foreign policy catastrophe that can’t be blamed on George Bush, the Koch Brothers, or the Republican War on Women. This, in turn, leads to more uncertainty in a bad part of the world, which adds once again to the headline-risk overload.
As we write this column—just a bit after 10 a.m. EST—all market averages are barely budging, after the Dow itself opened nicely higher. Now, save for the NASDAQ, which suddenly wants to spike, averages are essentially flatlining.
Politics or no, pre-holiday trading, particularly during Thanksgiving week, tends to be light and trendless. After all, nearly every family that can afford a couple of tanks of petrol seems to be on the road, and you can’t trade and drive on your cellphone unless you’re open to encountering adverse revenue enhancement activities en route.
These early getaways are a good thing this week, since the weather dudes are threatening a way-snowy nor’easter will hit the heavily traveled eastern corridor with a potential for epic transportation snarls.
But again for us, this means thin trading, which gives the HFTs a free hand to play things their way, which in turn means you could get stuck, and not just in traffic.
Barring the sudden light-up of any of our listed headline risks, no read is really possible in thin markets like this, so expect our commentary to be light for the rest of this week. All markets, of course, will be closed Thursday for the holiday, so we won’t be contributing a column on Thanksgiving at all. We may take Friday off, too, even though it’s a regular trading day. Action can be risky on that day, too, particularly since it’s still supposed to be Black Friday, except for customers of Amazon.com.
Holiday trading info listed below, after our next section.
Today’s trading tips:
Slow trading today, and we likely won’t have any more trading tips this week due to the aforementioned holiday trading vectors.
We are, in spite of our better judgment, slipping back into at least one major oil stock we briefly exited last week: Hess (HES). There’s likely going to be some good action in that company after January 1, 2015 which marks a year in which HES is scheduled to continue its transformation into a more profitable company by slimming down and spinning off assets, presumably to shareholders. We’d like some of that.
We may get back into Anadarko (APC) as well, but haven’t done so just yet. The stock is still trading wildly, so we’re looking for a better price. Due to business climate and tax benefits, 2015 should also be a good year for APC, unless oil prices get pinned much below $75 bbl., in which case all the oil companies will get killed.
We have also begun a small position in another also-ran, underrated oil company, Murphy Oil (MUR). We’re already down today (figures) but we don’t yet have what we regard as a full position. Presuming near-term wobbly pricing in this issue, we’re prepared to average down.
Otherwise, we’re not looking to do much this week. Trading action on thin volume can give bad signals, and we’ve had more than enough of them this week.
Holiday Trading Hours
THURSDAY NOVEMBER 27, 2014: All U.S. markets (including equity, option, and fixed income) are closed for the Thanksgiving Day holiday, including pre-market and after-market close trading.
FRIDAY, NOVEMBER 28, 2014: Pre-Market Trading will take place as usual, but U.S. equity, option, and listed corporate bond markets will close early at 1:00 p.m. EST, with after-hours trading conducted from 1:15 p.m.-5:00 p.m. EST.
CANADIAN MARKETS: Open for trading on Thursday November 27, 2014, but new orders or change orders placed after the close of the U.S. Market on Wednesday, November 26, 2014 will route to the Canadian exchanges on Friday, November 28, 2014. Canadian markets will be open for regularly scheduled trading hours on Friday November 28, 2014. But new orders or change orders placed after the early close of U.S. markets on Friday, November 28, 2014 will route to the Canadian exchanges on Monday, December 1, 2014.
The key take-away to all the above is that, aside from Thursday’s trading close and Friday’s half-day trading in U.S. markets, action here and in Canada continues in a normal fashion, save that regular way settlement will be delayed due to the holiday.
If you’re completely confused and think you might need holiday $$ from trading (which you shouldn’t, tsk-tsk), best thing is to call your broker and get specifics which can vary by house.
*Cartoon by Branco, reprinted by agreement, courtesy of LegalInsurrection.com, which requires this link.