Chart Ideas

[rimshot]

In this week’s episode of LPL Market Signals dated December 17, 2018

Ryan Detrick and @jbuchbinder_LPL discuss four major topics

Listen here for the podcast:

https://lplfinancial.lpl.com/news-media/research-insights/potential-government-shutdown-adds-to-drama-podcast.html?cid=

In this week’s Market Signals podcast, our LPL Research strategists discuss four major topics creating drama in both the market and the US’s economic outlook:
a bad December start for equities,
another rate hike,
the Brexit and China issues,
and a potential government shutdown.

First, we’ve just experienced the worst start to the month of December for equities since 1980. Nonetheless, LPL’s strategists see reasons to be on the lookout for a potential “Santa Claus” rally. Stocks tend to do well the second half of December. In addition, various measures of market sentiment are flashing extreme pessimism. That could mark a contrarian low.

Second, the Fed is set to announce an interest rate hike on Wednesday. Another hike is likely but may not occur until the first half of next year.

Brexit continues to make the news headlines, as the situation gets messier. At the same time, China’s economic growth is slowing down. Still, 5% is impressive for a country that large.

The fourth topic is the possibility of a government shutdown later this week. The good news is that stocks have historically taken shutdowns in stride and this could be the case again.



December is known for being one of the best months of the year, but it is interesting to note that the majority of the gains for the S&P 500 tend to happen the second half of the month. Suggesting there is still time for Santa to come in 2018.
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S&P 1500 composite index daily chart
with related internals and other indices -

* three "bear kisses" of the 100-day sma in the 2nd half of
2018, and these brief price rally highs were located
at substantially lower levels than the earlier 2018 price highs
for this index