12/17/2010 - US Equities Markets Quiet as Traders Leave Early to Spend Tax Cut Money

US Equities Markets Quiet as Traders Leave Early to Spend Tax Cut Money December 19th, 2010 by Keith Schneider

Market Indexes S&P 500 (SPY): The market had yet another quiet day on extremely light volume as year end doldrums set in. Very sloppy, choppy, see-saw action in most market sectors. The market phase is still bullish, and consolidating at a high level. We are on a cycle high right here with the 10 day MA just below todays lows (as are most indexes) and bears careful attention. At this point we are keeping positions small and few, and looking to scalp a little here and there.

Market Internals 

VIX (sentiment): This indicator is in the middle of trading bands and slowly trending lower... bullish.

Accumulation/Distribution Volume: Volume patterns are still neutral to positive as low year trading take hold. 

Up/Down Volume: The market has drifted up as this indicator worked off its overbought short term reading this week... bullish. 

McClellan Oscillator: This indicator is still stuck in the middle of its range. Nothing to infer here. 

Sectors and Precious Metals 

GLD (gold): This metal continues to pick up intra-day volatility and make for some great day trading. It closed lower for the week after a big up opening last Monday. We are now sitting back on the 50 day MA and we like the idea of following the next move either way. Primary trend is still bullish, but a large selloff is also possible. 

SLV (silver): The bearish engulfing pattern is still keeping a lid on this metal, but it is much stronger than Gold as it is trading within the bearish engulfing pattern day. Silver is the go-to metal here and closed above its 10 day MA. 

IBB (Bio tech): This sector continued on it's tear as a market leader and broke out to new yearly highs on convincing volume. Looking for more of the same. 

Industrial metals (especially steel and copper) were some of the few trending sectors. With the tax cuts and economic growth looking to expand, these metals should continue to push higher.