Dow Jones 19945 +11 ; Nasdaq 5487 +25; S&P 2269 +5; Russell Small Caps 1378 +6

The Dow comes just shy of that 20k number as traders are coming off their naughty hangovers and dusting off their tuxedos for their Gatsby-an midnight toasts. Sure, 20,000 is just an "arbitrary" number in itself, but the "psychological" aspect of it makes it a "magnet" for everyone to monitor. Specifically with the way "round numbers" work psychologically on any market participants.

What's Noteworthy?

  • The Nasdaq kicked off this holiday week with a breakout to a new high.
  • The "Santa Claus Rally" actually starts this week.  Historically, it is a reference to the market's ability to "drift higher" between Christmas and the New Year.  It is theorized it has to do with the lack of liquidity surrounding the holiday vacation time which leads to traders not making any significant moves into year-end. With this slow drift the bias remains higher as more and more "window dressing" takes place and asset valuations get further stretched.

Market Internals

  • DOW closes up at 19945 ( 0.06%). Nasdaq closes up at 5487 ( 0.45%).
  • S&P500 closes up at 2268.87 ( 0.22%). Action came on lower than average volume(NYSE 488 mln vs avg. of 991 mln; Nasdaq 1202 mln vs avg. of 1818 mln), w/ advancers outpacing decliners (NYSE 1860/1157, NASDAQ 1723/1123) and new highs outpacing new lows (NYSE 140/19, NASDAQ 197/32)

Relative Strength

Junior Gold Mine-GDXJ +3.39%, Grains Subindex-JJG +3.18%, Gold Miners-GDX +2.64%, Global X Silver Miners -SIL +2.4477%, U.S. Diesel-Heating-UHN +2.3458%, Russia-RSX +1.8%, Greece 20-GREK +1.8%, Philippines-EPHE +1.692%, Indonesia-IDX +1.53%, BRIC-EEB +1.231%

Relative Weakness: 

Short Term Futures-VXX -1.47%, Egypt -EGPT -1.29%, Coffee-JO -1.25%, Indian Rupee -ICN -1.106%, Turkey-TUR -0.65%, Rare Earth Metals-REMX -0.62%, Japan-EWJ -0.593%, US Preferred Stock -PFF -0.469%, Mexico-EWW -0.4574%, 20+ Year Treasury Bond-TLT -0.41%

Notable Price Action:

I really like the way $GS, $DE, and $MMM behaved today. Don't be surprised to see $GS breakout again tomorrow morning.

Don't be surprised to see the DOW 20K broken early tomorrow morning.