Buyers came in fast and furious in early morning action creating a euphoric pop and an exciting start to the day. Unfortunately the troops ran out of bullets quickly and when there was no traction, those looking for some positive action packed it in early and spent the remainder of the day polishing off leftovers and shopping on gift cards.

 

The indices fell sharply on the day and sectors such as oil, semiconductors and the general small cap index took sharp whacks. While it doesn’t make the hits any easier to take, the action today felt like a lack of buying rather than intense selling.

 

With anemic volume on the day it is clear that many have already packed it in calling it a year. Furthermore, with what historically has been day 1 of the famous ‘Santa Claus Rally’ many traders especially those firing e-mails my way, have given up hope on any positive action and are quickly deferring to the beginning of 2005 as a new historical tradition.

 

We aren’t throwing in the towel just yet and suspect the combination of thin trading, pessimism and flowing eggnog may still set us up for a sprint to the finish line.

 

We’re keeping one eye on the watch list and another on the P&L as 2006 creeps in. We remain on the ready should Santa decide to throw a few more presents are way but won’t let things slip too much further before circling the wagons and packing it in.

 

 

Have a good evening.

 

RevShark