Special Risk Capital Management LLC

Range Bound Market . . . The Wait Continues December 15, 2012

The S&P 500 Index was down very slightly for the week by -0.32%, likewise for the NASDAQ Composite down -0.23%.  In between the Friday to Friday close where was a fair amount of movement but the net result was pretty much going no where.  As one can see in the chart below the NASDAQ remains in a range between 3040 and 2965 with volume remaining rather constant.

My take is that there is not much buying or selling going on right now, likely most of the year-end selling has already taken place with folks putting their long-term capital gains into 2012, instead of 2013 with the likely higher tax rates.  And so it goes.  This market looks like it continues to wait for the debt and deficit talks to tip their hand in some manner or another.

The US markets don’t look weak, on the contrary stocks appear to be under continued Accumulation (money flowing into them) as shown in the pie chart below (in green).

Also of note is that the International markets have been doing either well (Emerging Markets) or OK (Europe).  The Relative Strength chart below shows the per cent changes in price since June 1, 2012 (a relative market low point).

The Pacific countries (China, Japan, Thialand, etc.) seem to be the strongest, while Latin American countries seem to be more in line with the US.  I didn’t plot a European Index on this chart because its strength has been relatively recent but the performance of select EU countries is fairly strong, and may bear an investigation.

That’s about it for this week.   Expect market volumes to drop as we get closer to the Christmas – New Years “break week” and we continue to look toward Washington for signs of agreement.  Take Care and have a good week.  ……  Tom  …….

charts by MetaStock & www.HighGrowthStock.com used with permission; click on graphics to enlarge