As traders head back to the market after the holiday we see a few movers but volume is light.
On the commodity side, gold is climbing higher - some conservative traders are building a position incase this recent equity rally fails. Crude oil is moving lower, mainly due to the overall weaker market conditions this week as many investors head to the sidelines to enjoy the holidays. As an individual commodity, we should see crude fairly active this time of year - as travel plans usually help move prices higher. Grains are weaker with lack of fundamental news. Soft commodities have had lower prices the last few weeks after a strong final quarter of 2023.
Equities started the day weaker but turned positive. Notes had moved higher. Bond yields appear to support that rates will be cut in 2024. The January FOMC meeting will give the markets some preview of how the year will go. I'm still on the side that there will be at least three cuts in '24. Consumer spending appears to show that the general public believes inflation is slowing down and there is some confidence back in the market.
Tesla is one stock enjoying the "Santa Claus" rally. The stock is up over 2% thus far and appears to moving higher on news of a new version of one of Tesla's more popular models, the "Y." This rally could gain some traction as volume increases towards the new year. On a chart, Tesla also has some room to run back towards it's highs. I think it's realistic to see this stock back above $275 to start the year.
Apple continues to run away from $200 as the stock appears weaker on legal news. Apple has bans and court proceedings stemming from their watch that has weakening demand. Apple technically has support at $190 but a break below that will have the price headed towards $182 most likely. Look for holiday sales to hopefully help the stock hold near these current levels.
As we head into the final few trading days of 2023 look for the lower volume to be the main catalyst for the market. A lot of traders have already positioned themselves for the start of the new year but there are still opportunities to catch quick, small moves.
Disclaimer: Past performance is not indicative of future returns. Opinions are my own. Profitable trades are not guaranteed.
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