Market Briefing For Friday, December 30

Floating consolidation through seasonal factors is occurring in historically stellar fashion, suggesting absorption of selling is better than was thought possible, at least so far. On the other hand, money managers tend to park funds in the S&P particularly at this time of year, which helps them maintain what I know they like to do this time of year, not be heroic and essentially match the Indexes, or their peers. This contributes to a modicum of neutrality.

This year the prospects were (and remain) at variance in terms of 'risks', by both an overbought market (typically when you're this far above a 'standard deviation' mean, one should be wary just for that reason), and realization a lot of the

The 'Trump Honeymoon' rally is behind. Yes much more can be ahead down-the-line, but that may require enactment of several of the proposals, especially when it comes to tax reform, and to a degree the trade issues.

So... with not much new on the data side, and little response to the latest in the Russian cyber-espionage saga by the market, let's opine a bit via the videos on the topic too. Basically President Obama is upset Russia helped Wikileaks reveal the 'truth' about the emails to Americans; thus impacting the Election. Which means the Democrats are mostly mad that transparency with the truth about the email content, not just the use of a Server, came to the light of the American voters; and that means they'd have preferred it not be known; as they never said the emails coming via WikiLeaks weren't true.

Also, one ponders that it's more politics than the Russian hacking itself; or they would have moved sooner just based on corporate hacking that's gone on for many years, as the Government also stated. What we need to do with the Russians, perhaps assisted by these new sanctions, is compel the first 'cyber-security treaty', perhaps involving other nations too (a UN Resolution perhaps; haha). What we don't need is filmmaker

Michael Moore is pleading with citizens to protest the Inauguration, which is divisive and inciting of hate; hence about as intolerant as the very characteristic he usually roils against.

(Questioning and protesting is fine; typically when something actually occurs not simply because your candidate didn't win. They should save it for when or if there really is a human rights violation or similar worthy of the effort.)

For now the year-end behavior is extremely mild, in an overbought market. 

Daily action - comments about the 'inside day' idea that has technicians on the lookout for more upside; although I'm one who often fades breakouts as they draw-in after-the-fact buyers, rather than serious investment money as would prefer to nibble away during periods of weakness.

 

In this case the upside was triggered by the Election, and that's why we've of course discussed at-length (see last night's report if you're new with us) my thoughts about why a majority of year-end upside bias has already been seen and pretty much has been on fumes for a couple weeks now.

Nevertheless, Thursday's action was very mild considering it was the initial day trades could 'settle' in 2017; which had apparently little effect thus far. It was also the first of the two-days of presumed 'heavy' reallocation which for that matter has also had little discernible impact. And the Russian sage that now includes expelling Diplomats, had no discernible impact either.

That's a topic I'll touch-on, though it's all over the news and clearly is viewed as 'political' in every conceivable aspect. The only story some news sources may have missed, because it came late, is that Donald Trump will be meeting tomorrow with intelligence officials for a rundown on what's now 'going on' ... presumably his request suggests that Putin should not automatically think Trump will be a pushover for his vaunted desire for a normalization of relations and removal of sanctions.

Actually I think President Obama's move is correct; just way too late given how long the intelligence-gathering operations have been ongoing (that's of course what makes it look bitter... as did the moves to circumvent informing Israel of how we'd vote on a poorly-worded UN Resolution). These events are just a bit too unusual to be occurring just before New Years and also the Inauguration.

Incidentally I also think President-Elect Trump is 'not' inhibited but assisted, by these actions taken that President Obama 'may' think undermine him at the start. Why? Obama doing this gives Trump MORE leverage to get a good deal with Putin .. as now he can hold out the candle of removing these as well as more.... Obama didn't intend it thusly; but may have just helped.

Friday's market pattern should vary with perhaps several waves of selling that are related to re-balancing. If they want to finish it firm we'd be fine with that; but really the question is whether there's enough buy-side interest to offset seasonal influences as we've discussed.