Wednesday, December 30, 2009

New Year 2010 the Year of the Tiger

On the last full trading session of the year, the S&P 500 and the Dow traded mostly in the red, but the indexes lifted in the afternoon and closed flat. Both indexes added a minute 0.02% for the session (for the week, the S&P 500 is currently up 0.73% while the Dow has gained 0.79%). Meanwhile, the NASDAQ 100 outperformed, climbing 0.35% today (the index is presently sporting a weekly gain of 2.13%).

Today's volume output on the S&P 500 was an anemic 1,780 million shares - 51% below the index's average daily volume production over the past three months.

The year's last full session brought little excitement and was again characterized by anemic volume (merely 650 million shares traded on the NYSE where the 50-day average is roughly 1.2 billion shares). The S&P 500 and the Dow spent most of the session mildly in the red but closed flat; the Nasdaq 100 was stronger, aided by strength in the semiconductor sector. A lack of leadership was again noted by the press.

The day's only notable economic data release pertained to the Chicago Purchasing Managers Index. According to the Institute for Supply Management, the latest ISM-Chicago data showed a pickup in production, new orders, and an improvement in the region's employment situation. The ISM-Chicago came in at a reading of 60.0 (beating economists' expectations), its best showing since 2006. The four-year high on the index shows that the US economy continues to recover, analysts commented.

Because of the dearth of noteworthy economic or corporate news releases, investors focused on the US dollar which ultimately gained 0.1% against a basket of major currencies.

Another sign that the fallout from the financial crisis is not over: The Treasury Department announced today that General Motors' former financing unit - GMAC Financial Services - will receive further government funding. $3.8 billion in cash will be pumped into GMAC to assist the company in dealing with its home mortgage business losses. Previously, GMAC had already received $12.5 billion in taxpayer money. The latest injection will boost the federal government's ownership stake in GMAC - from 35% to 56%.

Open Position: SHORT E-Mini S&P500 ( ES ) from 1126.

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