Skip to main content
  1. News
  2. Business & Finance
  3. Stock Market

Weekly Market Recap – December 14, 2013

See also

Overview

The markets were down this past week due to profit taking and renewed expectations of tapering next week. The biggest decline in the markets occurred Wednesday on news that Congress will approve a two-year budget, which is seen as increasing the probability of tapering on December 18th (since the lack of a budget and debt ceiling was one of the reasons for the Fed to delay tapering). Strong retail sales on Thursday just added to the early tapering expectation.

As reflected in retail sales, demand is rising; and as reflected in the Producer Price Index and import prices, inflation remains subdued (which does give the Fed room to continue with quantitative easing).

While the odds of tapering next week have increased, most economists hold the opinion that tapering will not occur till January or March; few economists expect it to occur in December. The Fed is transitioning its leadership, with the Senate confirmation for Janet Yellen nearly completed (it was approved by the Senate Banking Committee, and will go before the full Senate shortly). When this occurs, Janet Yellen will replace Chairman Ben Bernanke on February 1st.

The markets will focus next week on the Fed's FOMC decision on tapering. Economic news recently has shown modest improvement with the Jobs Report and Retail Sales Report. The news next week will highlight two key sectors: Manufacturing and Housing.

Expectations for a rally continue with Asset Managers buying dips till year-end. If the news for tapering occurs next week, expect the markets to drop further leading to a possible correction; if not, expect the markets to rise dramatically.

Market Gauge

Year-to-date the markets are up: Dow 20.2%; S&P500 24.5%; Nasdaq 32.5%.

The Markets for the past week were: DJIA down -1.7%; S&P500 down -1.6%; Nasdaq COMP down -1.5%.

Commodities (ETFs) for the past week were: Gold (GLD) up 0.70%; Silver (SLV) up 1.01%; Oil (OIH) down -2.02%; Dollar (UUP) down -0.00%; 30-yr Bonds dropped 1 basis points to 3.88%.

The VIX this past week (a measure of market sentiment and volatility) rose to 15.76 due largely to increase tapering expectations.

Top Headlines

In the U.S., House passes budget, now before the Senate; Florida citrus crop at 'serious risk'; battered Abercrombie hopes size matters; 3,000 gallons of beer leaked at Mass. brewery; Charter Communications to bid for Time Warner Communications at under $140 a share; pension funds cut long-term expectations to 3% from 8%; Amazon to launch Pantry to take on Costco, Sam's; Qualcomm names new CEO and president; strikers stir minimum wage debate; explosion of internet shopping may save retailers this Christmas; DirecTV explores web video; $8 per gallon milk if Farm bill is not passed; criminal action is expected for JPMorgan in Madoff case; fewer US homes entered foreclosure path in November; a number of tax breaks are due to expire; Buffalo Wild Wings switches from Coke to Pepsi; and millions to lose jobless benefits after Christmas.

In Europe, Ireland picking up Europe's bar tab; drones over the skies of Europe?; after Scotland, another European breakaway?; 'Sense of achievement' as Ireland leaves bailout; European watchdog throws cold water on Bitcoin; gold price probe extended to Deutsche Bank; hedge funds bet against Manchester United; French carmakers poised to re-enter Iranian market; ECB will not unilaterally assign risk weightings to various governments; Putin defiant on spending plan despite Russia downturn; British member of Parliament in line for 11% pay rise; Slovenia reveals its banks need billions in capital; Peugeot hit by writedown; and ECB to get tough on sovereign bond risks.

In Asia, is Singapore's social stability under threat?; dollar soars to 5-year high against yen; art auction to test India's demand for luxury; BoJ to keep monetary policy till inflation hits 2%; get ready for China's next IPO tidal wave; China to become a liberalized superpower within a decade?; Asia-Pacific beats Europe in M&A space; China goes after Qualcomm on antitrust; Hong Kong IPOs just ramping up; 8.6% China growth?; iPhone market share quadruples in China; Malaysia's market has outperformed Southeast Asia peers; China's hot messaging app may be good news for censors; worker deaths raise questions at Apple contractor in China; trade settlement in yuan to grow by 50% in 2014; and next emerging market sell-off may be time to pounce when tapering occurs.

Weekly Review

On Monday, with little news and lots of FedSpeak regarding tapering, the Dow rose fractionally to 16,025.

On Tuesday, with little news and profit taking, the Dow dropped -0.3% to 15,973. Gold rose $20 to $1,280.

On Wednesday, with an initial budget agreement raising tapering concerns, the Dow dropped 0.8% to 15,843.

On Thursday, with a better-than-expected Retail Sales Report increasing tapering concerns, the Dow dropped -0.7% to 15,739. Gold dropped $20 to under $1,230.

On Friday, with Producer Price Index showing very little inflationary pressures, the Dow rose fractionally to 16,755.

Next Week's Calendar

The economic calendar for next week is heavy: on Monday – Empire State Mfg Survey, Productivity and Costs, PMI Mfg Index Flash, Treasury International Capital, Industrial Production; on Tuesday – Consumer Price Index, Housing Market Index; on Wednesday – Housing Starts, EIA Petroleum Status Report, FOMC Meeting Announcement, FOMC Forecasts, Chairman Press Conference; on Thursday – Weekly Jobless Claims, Philadelphia Fed Survey, Existing Home Sales; and Friday – GDP.

If the Markets move down, stay on the side lines or consider Contra ETFs. For Option players, selling premium is advised. To learn more about options and earning consistent weekly income, go to optionsannex.com. This article is authored by Ron Berg.

To the Charts

The following ETFs (DIA, SPY, QQQ) provide a technical review of the Market (and are also excellent Option trading vehicles). Represented are the Dow Industrials (DIA), S&P500 (SPY), and Nasdaq 100 (QQQ).

The Charts for each include views for Monthly, Weekly (including Price Channels), and Daily (including monthly Pivot Points) with MACD and Stochastic indicators. The Pivots are: white for central pivot point; yellow for R1 and S1; magenta for R2 and S2; red for R3 and S3.

DIA

SEE CHART ABOVE

The Dow Industrials (DIA) closed down at 157.65. If the DIA drops, then the next level of support will be at 146.96 (weekly chart); the next level of major resistance is 161.58 (weekly chart).

The monthly chart indicates a bullish posture (up Arrow) with the MACD positive but weakening, and the Stochastic moving up above the overbought area.

The weekly chart indicates a bearish posture (down Arrow) with the MACD positive but weakening, and the Stochastic moving down above the overbought area.

The daily chart indicates a bearish posture (down Arrow) with the MACD negative and weakening, and the Stochastic moving down above the oversold area.

SPY

SEE CHART ABOVE

The S&P500 (SPY) closed down at 178.11. If the SPY drops, then the next level of support will be at 164.53 (weekly chart); the next level of major resistance is 181.75 (weekly chart).

The monthly chart indicates a bullish posture (up Arrow) with the MACD positive but weakening, and the Stochastic moving up above the overbought area.

The weekly chart indicates a bullish posture (up Arrow) with the MACD positive but weakening, and the Stochastic moving down above the overbought area.

The daily chart indicates a bearish posture (down Arrow) with the MACD negative and weakening, and the Stochastic moving down below the midpoint.

QQQ

SEE CHART ABOVE

The Nasdaq 100 (QQQ) closed down at 84.85. If the QQQ drops, then the next level of support will be at 76.35 (weekly chart); the next level of major resistance is 86.53 (weekly chart).

The monthly chart indicates a bullish posture (up Arrow) with the MACD positive and strengthening, and the Stochastic moving up above the overbought area.

The weekly chart indicates a bullish posture (up Arrow) with the MACD positive but weakening, and the Stochastic moving down above the overbought area.

The daily chart indicates a bearish posture (down Arrow) with the MACD positive but weakening, and the Stochastic moving down below the overbought area.

If you would like to learn about trading options, and how to generate consistent weekly income trading options, go to Options Annex.

Advertisement

News

  • Ukraine
    Ukrainians have photo evidence that connect Russian soldiers to unrest in the country
    Video
    Watch Video
  • Drone strikes in Yemen
    An estimated 65 al-Qaeda militants were killed in drone strikes over the weekend
    World News
  • FBI investigates stowaway
    After a teen snuck into a plane's landing gear, the FBI will reevaluate airport security
    Headlines
  • American wins Boston Marathon
    Meb Keflezighi becomes the first American to win the Boston Marathon in decades
    Sports
  • Search for MH370
    As the search for MH370 in the ocean goes dim, crews may shift the search area yet again
    Headlines
  • Ferry disaster claims over 100 lives
    The death toll for the South Korean ferry disaster rises above 100
    Video
    Watch Video

User login

Log in
Sign in with your email and password. Or reset your password.
Write for us
Interested in becoming an Examiner and sharing your experience and passion? We're always looking for quality writers. Find out more about Examiner.com and apply today!