Trading Volume Is Light – Be Very Patient Today and Trim Your Size

Posted 9:30 AM ET - Yesterday the market gave back some of Friday's gains. Typically we get a move one way on Black Friday and then it reverses on Cyber Monday. Trading volumes are light and that should improve after today. GDP came in slightly better-than-expected (3.2%) and the Fed will hike in two weeks. The economic releases this week should be consistent with stable growth. Jobs should come in around 175,000 on Friday. China has been tightening money supply in the last month. Inflation is starting to creep higher and they won't be able to suppress interest rates. As long as global growth is present, a slight interest rate hike will be absorbed by the market. I expect the breakout at SPY $219.50 to be tested. That level should hold and we should bounce off of it into year-end. After the election we saw a rotation into financials, industrials and basic materials. That move seems over-extended and we should see a rotation back into technology. Trading volumes will be light today and the range should be compressed. Trim your size and your activity until it improves. I will be very patient today and I might only do a few trades. Let the first 30 minutes elapsed and get a feel for market direction before trading. I will favor the long side, but I will also look for opportunities on the short side. . .

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