MID - Equity Market Insight December 29, 2015

Tuesday, December 29, 2015, 12:59 PM, EST

Once again, stocks are following the crude oil trend, as the Dow is higher by triple digits this morning. Volume is light, but the bulls appear to be committed to see equities end 2015 on high note. Information Tech and Healthcare are the best performing sectors today, both higher by more than 1%. Dow +0.9%, S&P 500 +0.8%, Nasdaq +1.1%, R2000 +0.25%

  • Winter has arrived and a possible rebound for Natural Gas and Oil. A wintery mix across the eastern-half of the US has the heating commodities up over significantly over the past week, while the bears believe that this is purely a "dead cat bounce" and historically high inventories are going to continue to weigh on the prices.
  • Consumer Confidence for November came in higher than expected as the optimistic job market and cheap gas/oil appear to be giving people in the US assurance heading into 2016.
  • It was record year for M&A deals worldwide in 2015, exceed $5 trillion, outpacing 2007, which saw a total of $4.6 trillion in deals. North America provided more than half of the total dollars spent on deals ($2.6 trillion), helped by the Pfizer for Allergan ($183 billion) and Time Warner for Charter Communications ($79 billion) announcements. Investors are now debating whether or not this robust year is a signal to the end of the bull market, as skeptics believe that the major indices should have posted higher gains YoY.

Technical Take

As of 10:20 AM EST, Nasdaq Composite:

  • Advancers: 1643
  • Decliners: 510
  • Advance Volume: 44MM shares
  • Decline Volume: 12MM shares
  • New 52 week Highs (prior close): 43
  • New 52 week Lows (prior close): 49

With equity markets again taking their cues from Oil which is presently up about 2%, stocks are climbing nicely so far after ultimately recovering almost all of their intraday losses yesterday. As such, hopes for a resumption of a year-end rally have sprung back to life though volume is naturally light. Clearing and closing above first resistances would be promising but it would be even more encouraging to see the small caps participate more strongly on the advances as a measure of breadth.

  • Yesterday the S&P 500 Index (SPX) managed to get back most of its losses by the end of the day after testing the lows of 12/23 around 2040. Today the index is now back above its rising 50 day and falling 200 day moving averages at 2066 and 2061 respectively. A close above 2075 would be another sign of progress toward the greater goal of exceeding November highs around 2110 and continuing the longer term rally.
  • The Nasdaq Composite Index (CCMP) is also being propelled today, beyond the midpoint of its 5160 to 4905 trading range and, at least for now, above its highs from 12/17. While it is likely too early to confirm, we’d highlight a tentative bullish MACD cross appearing today from below the 0 line, a possible sign of a resumption of the rally. In the bottom panel we focus readers’ attention on the bullish MACD turns (in green) and bearish ones (in red) over the course of the last 6 months, having been generally accurate trading signals. MACD indicator

The Nasdaq's Market Intelligence Desk (MID) Team includes:

Michael Sokoll, CFA is a Senior Managing Director on the Market Intelligence Desk (MID) at Nasdaq with over 25 years of equity market experience. In this role, he manages a team of professionals responsible for providing NASDAQ-listed companies with real-time trading analysis and objective market information.

Jeffrey LaRocque is a Director on the Market Intelligence Desk (MID) at Nasdaq, covering U.S. equities with over 10 years of experience having learned market structure while working on institutional trading desks and as a stock surveillance analyst. Jeff's diverse professional knowledge includes IPOs, Technical Analysis and Options Trading.

Vincent Randazzo, CMT is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq with over 13 years of experience in equity markets having served in equity research sales and desk analyst roles at major banks. Vincent’s specific expertise is in technical analysis and has been a Chartered Market Technician (CMT) since 2007.

Steven Brown is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq with over twenty years of experience in equities. With a focus on client retention he currently covers the Financial, Energy and Media sectors.

Christopher Dearborn is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq. Chris has over two decades of equity market experience including floor and screen based trading, corporate access, IPOs and asset allocation. Chris is responsible for providing timely, accurate and objective market and trading-related information to Nasdaq-listed companies.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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