From the Trading Desk

Stocks Close Lower after Christmas Holiday

Low volatility continues to reign supreme as stocks inch lower. AAPL weighed down the market, but it did find support at the 50-day moving average. A clear line of support. Small caps finished higher on the session while the broader market paused. Post-Christmas trading really has never been a week of huge gains. We do expect light volume as well as tight trading to continue into the new year. What next year will bring is anyone’s best guess. Given historical returns 2018 should be another solid year for stocks. Our job is to follow price. It is the apex predator where everything else feeds into it. No reason to fight the trend and so far, continuing to be on this uptrend has paid off nicely. Stick with the trend.

Commentary is certainly going to be tough this week. Unless, we see North Korea launch a missile that does not simply land in the ocean. Russia tested a missile with the capability to penetrate missile defense systems. War is profitable, and it is unfortunate humans cannot simply live in peace. Work towards something greater than trying to destroy one-another. At least we have stocks and trends. At the end of the day we can only control our own actions. Proper risk management is paramount. Let’s focus on what we can control and let worrying about macro events to others.

FANG stocks are looking a little rough these days. FB and NFLX are both trading below their 50 day moving averages and AAPL slipped on Tuesday. AMZN is riding high after what should be a banner Christmas/Holiday season. GOOGL is right there with AMZN and continues to trade well. The sluggishness of this group is something to keep an eye on. You never know if FB or NFLX may even reverse course and set up a pocket pivot.

We hope you had a nice holiday weekend and a great start to the trading week. Let’s wrap up a great 2017 and look forward to progress in 2018.

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