It wasn’t pretty.  After every sector opened higher, the market turned sharply, signaling that many would-be sellers wanted to cash in on recent gains. These folks should not be confused with “weak sisters,” an old saying for investors who sell for a loss because they can’t take the emotional toll of a down session. Typically, “weak sisters” sell in waves as weakness begets weakness. Only two sessions finished higher on the session. And ‘low volume’ was the only unscathed factor.

Where the Party At?

It was a record day for the NASDAQ Composite.

• 13.4 billion shares shattered the previous record of 11.9 billion on May 16, 2024
• Less than 30% of components traded higher

Key Indicators

The rate of change (ROC), money flow Index (MFI), and the relative strength Index (RSI) are beaten down but still have room to move lower.

The Joint Is Packed and Its Jumping

More than 65% of the volume was in advancing stocks. 

Most volume is driven by investors chasing names. Back in the day, they used to call this the ‘Greater Fool Theory,’ where the assumption was that one could pay any price for a stock because someone else was willing to pay even more.

I’m not buying that. Although many overbought stocks exist, the big names present value propositions that augur for even higher share prices.

But we know one thing for sure, it's going to get wilder and more volatile. Hang in there, sister.

Economic Data

There was profit-taking right out of the gate, but selling picked up speed with the release of the JOLTS report (8.01M job openings) and the Institute For Supply Management (ISM) services report, where everything moved in the wrong direction for those hoping for an accommodative Fed and lower rates.

• Headline 54.1 - estimate 53.4
• Prices 64.4 - estimate 57.0
• Employment 51.4, down from 51.5

I wonder what the Fed is thinking.

Today’s Session

Major indices opened lower on tariff headlines. Moreover, higher yields continue to add some pressure on the market.

This morning, we heard dovish comments from the Fed Governor Waller.

Fed's Waller: I don't expect tariffs to have a significant impact on inflation.

Fed's Waller: I will support further cuts in 2025, but pace will depend on further inflation progress.

On the economic front, Initial Jobless Claims saw a surprising drop. 

December ADP payrolls slid to +122k from +146k in November, below consensus of +139k. The industry that added most jobs was health services (+57k), while manufacturing shed the most (-11k).

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