Breakdown

Observations

The US Equity market has been raging ever since Wednesday’s Federal Reserve Meeting. The S&P 500 had back to back 40 plus handle days, closing the week above 2070. Not to shabby, considering on Tuesday, it was trading around 1970 and change.

As has been the case this year, the market shrugged off any potential fears, including the Russian currency turmoil and weaker energy prices.

The VIX collapsed this week, moving from a high of 24.24 all the way down to 16.49 on Friday.

We’re expecting volume and trading to slow down next week. The equity markets are having an early close on December 24th and are closed on December 25th (Christmas).

Preview

Week Preview

• Monday: Existing Home Sales 10 am est.
• Tuesday:
  • Durable Goods 8:30 am est.
  • GDP 8:30 am est.
  • Personal Income 8:30 am est.
  • New Home sales 10 am est.
• Wednesday:
  • Jobless Claims 8:30 am est.
  • Market closes at 1 pm eastern.
• Thursday: Market Closed
• Friday: No big news

Notes and Observations

If anything, Tuesday might offer some opportunities, given there are surprises in any of the economic data releases. However, as mentioned, we expect volume to die down after Tuesday.

With that said, those trading options should be careful holding long theta and vega positions.

On a final note, it’s important for traders to remain patient when opportunities are scarce. It’s better to stay on the sidelines versus trying to force the issue. This time can be better spent on focusing on your trading process, reviewing what has been working and what hasn’t, studying charts or doing research on specific stocks or sectors.