The final trading session before Christmas is upon us. Outside of Asian markets many traders have already signed off for the year, taking their liquidity with them. Those hoping to find fortuitous trading setups over the holiday period may find themselves disappointed. Expect high volatility and choppy waters under the Christmas tree this year. Blame the market elves.
US indices finally eased off the gas peddle on Wednesday with the Nasdaq Comp, S&P 500 and Dow Jones all closing in the red, falling 1.50%, 1.47% and 1.27% respectively. Presents aren’t cheap. Whatever the reason for the pullback, it was merely a flash in the pan, most of the damage undone by the closing bell on Thursday.
Oil markets continued to face turmoil this week as Angola left OPEC. The development, while unexpected, has relatively little impact in terms of supply and demand dynamics. The Southern African nation could barely fill its quota anyway; its output peaked over a decade ago and has not recovered since. The real question is that of deteriorating cohesion within the oil producing nations, potentially contributing to the increasing prominence of US oil.
The lack of further escalation in the Red Sea left oil prices in no mans land over the past few days; a pattern also seen in gold, which continued to consolidate above the $2000 level this week but ultimately remained equally directionless. Many traders seem content to leave the market to its whims for now, focusing on things closer to heart. As well they might.
As we draw closer to the holiday season, I would like to take this chance to personally wish you all a wonderful end to the year and a prosperous start to the next. Happy holidays.
