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Despite a Jump in Consumer Confidence Late Day Selling puts a Clamp on the Day’s Gains

|Includes: DIA, PowerShares QQQ Trust ETF (QQQ), SPY

A real do nothing day as traders and investors come back from a long holiday weekend. Do nothing, yes; today’s holiday trade is quite meaningless as volume was quite light. NYSE volume was higher than Friday’s session, but by 1% and not to mention it was already LIGHT to begin with. The week between Christmas and New Year’s is always quite light and it really never amounts to much. Today’s action was okay; nothing great nor bad. Late day selling did put a slight negative tint on the day, but without big volume it’s tough to really put too much credence into the move. The best course of action is to protect your back side and await the New Year.

The number of stocks above their respective 20 day and 50 day moving averages does not spell any overbought conditions. McClellan Oscillator does remain at lofty levels, but nothing extreme. Perhaps we get a pull back, but again without volume it will be meaningless. Of course, the caveat would be hefty losses. Hopefully by now if you have been reading Big Wave Trading commentary big losses are never a good sign. Be smart, but don’t be a hero.

Doug Kass was making a bold prediction (snicker) on CNBC today. He believes while the first part of 2012 will be rocky new highs will be set on the S&P 500 this year. I am sure Kass’ crystal ball was telling him we would see new highs, but come on really? Kass has no clue whether or not we’ll hit new highs. What if we take out Oct 2011 lows first? What do you do then? Buy the dip? Could you? Too many questions and trend followers simply ignore the opinions and simply go with price. Volume always confirms moves and gives us conviction. I’d love for Kass to be right; we’d get a hell of a trend!

A quick check on the Shanghai index and we continue to witness the index continuing to hit new 52 week lows. It is not a surprise to me, just check out this:

“According to the property agency Homelink, new home prices in Beijing dropped 35 percent in November alone. And the free fall may continue for some time. Centaline, another leading property agency, estimates that developers have built up 22 months’ worth of unsold inventory in Beijing and 21 months’ worth in Shanghai.”

Property bubble? I know Jim Rogers is big on China and heck the United States powered through the 1930s. But, there is seriously something brewing in China and the Shanghai is giving you an indication it will not be pretty.

Enjoy the holiday shortened week!