A Short but Important Week for the Markets

Includes: DIA, QQQ, SPY
by: Wall Street Sector Selector

This week in we added one position to the Standard Portfolio, which closed the week with a +1.1% unrealized gain, and in the 2X Portfolio we closed (NYSEARCA:UYM) ProShares Ultra Basic Materials for +3.4% realized gain in 5 trading days. We also opened a new position in the 2X Portfolio on Friday morning.

The general indexes were slightly down for the week as the market remained in its sideways consolidation pattern. The S&P remains above its 50 Day Moving Average and on a Point and Figure "Buy" signal. Sooner or later, this sideways consolidation will have to end with a breakout one way or the other. In the meantime, short term trades seem to be having the best results as we continue this sideways drift.

It will be a short but important week with several important economic reports and the final surge of the Christmas shopping season.

Chart courtesy of www.StockCharts.com

In the sector world, it was mostly a down week as evidenced in the chart below, with only Energy (NYSEARCA:XLE) posting positive numbers.

Chart courtesy of stockcharts.com

The View from 35,000 Feet

Most of the news was good last week with RIM (RIMM) and Oracle (NYSE:ORCL) posting positive earnings and the December Empire Index, Leading Indicators, Philly Fed report and Housing Starts and Building Permits showing gains.

On the negative side, initial unemployment claims rose and on Friday seven banks failed to bring the yearly total to 140.

The Week Ahead

The week ahead is a short one with the Christmas Holiday but we’ll be getting reports on Q3 GDP, November Existing Home Sales, Consumer Sentiment and new home sales as well as the weekly employment number on Christmas Eve which everyone hopes isn’t a lump of coal.

Tuesday: Q3 GDP Estimate

Wednesday: November Personal Spending, December Consumer Sentiment, November New Home Sales

Thursday: Weekly Jobless Claims, Continuing Claims, November Durable Goods

Sector Spotlight

Leaders: Oil (NYSEARCA:USO) Homebuilders, (NYSEARCA:XLB) Energy (XLE)

Laggards: China, (NYSEARCA:FXI) Brazil,(NYSEARCA:EWZ) Hong Kong (NYSEARCA:EWH)

Disclosure: No positions.