Global Markets Stabilize – after Friday’s shellacking

To say that Friday was a distribution day for the NASDAQ and NYSE would be an understatement. “Shellacking” is a more accurate description of the day. The Dow Industrials (-2.11%), S&P 500 (-1.78%) and NASDAAQ (-1.59%) all fell sharply as volume on the NYSE (+44.08%) and NASDAQ (+73.21%) ballooned dramatically as a result of quadruple witching.

The Sector Heat Map offers no solace. Every major market sector lost ground – some did so in stunning fashion. Financials and Communications led the way lower shedding 3.28% and 3.15% respectively. Industrials (-2.31%) and Health Care (-2.14%) hardly did much better.

I don’t need to tell you that market trading has been exceptionally volatile, trend less, erratic and unnerving for investors recently. To underscore just how unusual our year-end trading has been consider this; the Dow Industrials have crossed both the 50 and 200 DMAs four times in less than two weeks. It closed above both DMAs twice and below both DMAs twice.

Crude’s impact on the market continues to weigh on equity pricing and overall market sentiment. With the Fed’s rate rise now baked into pricing and clear signs of investor fatigue setting in, markets are increasingly being dominated by crude’s blistering selloff.

The week ahead is a short one. Markets are closed on Friday for Christmas. Thursday is likely to have very light volume. Today’s Economic Calendar is limited to the Chicago Fed National Activity Index at 8:30 AM EST.

flickr photo: A Train