Special Risk Capital Management LLC

Rally Slowing December 25, 2016

Dec. 23, 2016 – This will be very short because not much has changed since last week.  There were additional signs of this post election rally slowing down, and even the media has now picked up on that.  Volume was very light (as expected) last week as Christmas vacations kicked in.

I see the 5340 level on the NASDAQ Composite Index as a likely retracement and 5250 as a major support level.  I continue to label this structure as a possible Distribution pattern; I’m always looking for changes.  Though the most likely scenario is a pause and re-accumulation.  I think the key factor will be what happens after the first of the year.  Will we see tax selling in 2017 (with presumed lower taxes), or will this rally have some legs to it?  Hard to tell right now.

Sectors that are strong are Telecom, Japan, Semiconductors, wireless and Banks.  I do see weakness in China and in some Emerging Market countries though, and Utilities are making a surprise move upwards (defense?).

Happy Holidays to all.  Take Care.      ………  Tom  ………..

(chart by MetaStock, used with permission)