U.S. markets traded in a fairly tight range to start the shortened week while finishing mixed on light volume.

The Nasdaq was the session laggard after falling 0.3% while trading in negative territory throughout the session.

The S&P 500 and the Dow slipped 0.1% and 0.03%, respectively, after showing some strength on the open while failing Friday’s highs.

Meanwhile, the Russell 2000 added 0.1% after trading in a 5-point range but also made a lower low than the previous session.

Energy added another 0.9% with the sector riding a six-session win streak while Real Estate was up 0.5%. Technology and Utilities were sector laggards after giving back 0.7% and 0.6%, respectively.

Global Economy- European markets were closed for the Boxing Day holiday

Asian markets finished mixed with China’s Shanghai rallying 0.8% while South Korea’s Kospi fell 0.7% and Japan’s Nikkei declined 0.2%. Australia and Hong Kong markets were also closed for the holiday.

The Japan November national CPI rose 0.6% year-over-year, stronger than expectations of 0.5%. The November national CPI ex-fresh food rose 0.9% year-over-year, stronger than expectations of 0.8%.

The November national CPI ex-food & energy rose 0.4% year-over-year, stronger than expectations of 0.3%.

Japan November overall household spending rose 1.7% year-over-year, stronger than expectations of 0.5% and the most in 5 months.

The Japan November jobless rate fell 0.1% to a 24-year low of 2.7%, stronger than expectations for no change.

Dallas Fed Manufacturing Survey jumped 10.3 points to 29.7 in December, topping expectations for a reading of 20.

The employment component surged to 20.4 from 6.3, with the workweek climbing to 23.3 from 11.5, while wages jumped to 25.1 versus November’s 14.2 reading.

New orders improved to 30.1 from 20.0. Prices paid were little changed at 32.5 from 32.2, and prices received edged up to 17.9 from 15.1.

The Richmond Fed manufacturing index came in at 20, down from its prior reading of 30 and below estimates for a print of 21.

Market Sentiment- The iShares 20+ Year Treasury Bond ETF (TLT) traded to a high of $125.53 after holding positive territory throughout the session.

The close above $125 was slightly bullish but resistance remains at $125.25-$125.50 and the 50-day moving average. Support is trying to move up to $124.75-$124.50.


Market Analysis- The Russell 2000 ETF (IWM) is back in a mini trading range between $152-$154 and levels that have held over the past six sessions with Tuesday’s high reaching $153.43.

Resistance is at $153.75-$154 with continued closes above the latter being a bullish development. The early December all-time high tapped $155.41.

Support is at $152.75-$152.50 with a move back below $152 leading to additional weakness towards $150-$149.50 and the 50-day moving average.

RSI remains flatlined with support at 55-50. A move below the latter and December lows would signal additional weakness with risk to 40 and November support.

Continued closes above 60 could lead to another run at 65-70.


The Materials Select Sector (XLB) traded to a fresh 52-week and all-time following today’s trip to $60.44 before closing slightly lower. Continued closes above $60.50-$60.75 would be bullish for a push towards $62-$62.50.

Support is at $59.75-$59.50 and represents the mid-December breakout above this level. There is additional help at $59-$58.75 and an up trending 50-day moving average on a close below the latter.

RSI is in an slight uptrend with resistance at 70.

A move above this level could lead to a run towards 80 and October highs on continued strength. Support is at the 60 level.


All the best,
Roger Scott