Summary
As we enter one of the most positive times of the year for the stock market, from December 19, 2024 to January 2, 2025, we see that the market has not been kind to the average stock or many sectors since the latter. part of November. Some blame it on tax-loss sales, which is likely. But there are sectors and indices that are falling from all-time highs, or at least from 2024 highs, so there can’t be any tax selling there. The NYSE amplitude on Tuesday was -1.611 as the streak of weak amplitude continues. NYSE’s 12-day advances/total issuances are down to 39%, one of the weakest readings in the last two years. And once again, the weakest indices were the NYSE, S&P 400, and S&P 600. We see some interesting data on Trader Engagement (COT), as well as some disturbing data (it just depends on which market). We mentioned earlier that the combined hedgers position of the main index was quite bearish, and when we look at two of its index components, we find that the positions of the S&P 500 and Nasdaq 100 hedgers are bearish as the smart money hedgers are in or near their most negative futures positions. At the same time, large speculators (hedge funds, momentum junkies) are extremely bullish on their futures positions.