Traders Return after Christmas to Move Stocks Substantially Higher

In terms of point gains today the Dow Jones Industrial Average had its greatest one-day market move in history. This move also took the record for the most significant daily percentage gain since March 2009.

Gaining almost 5% in trading today, the Dow gained 1,086.25 points. This represents a net gain on the day of 4.98%. The Dow index was not alone as traders bid the tech-heavy NASDAQ composite 5.84% higher on the day. After gaining 361.60 points, the NASDAQ closed at 6,554.52. The Standard & Poor’s 500 had gains very similar to the Dow by gaining 116 points, a 4.96% gain taking that index to 2,467.76.

The one thing that has marked U.S. equities throughout the month of December has been the extreme and severe price swings as it traded lower, and incredible upside surges when it rallied. As Charles Dickens said, “It was the best of times and it was the worst of times.” Although traders certainly did not experience a Christmas rally, if today is any indication of how stocks will trade through the end of the year, a New Year rally would not be out of the question.

U.S. Dollar Regains Upward Momentum

Of course, as we have seen on multiple occasions, solid gains in U.S. equities will tend to be highly supportive of the U.S. dollar, and such was the case today. Although the dollar was trading well below its recent highs, the support technical level of 95.90 held as recent lows moved to just below that price point and today close substantially higher. Also noteworthy is the fact that today’s close is above its 50-day moving average, for the first time in the last four trading days. Currently, we still see resistance created from the former tops at 97.39, and major resistance at 9776 which is the 0.618% retracement — a go-ahead.

Risk-On Market Sentiment and Dollar Strength Move Gold Fractionally Lower.

With the exception of gold, the remaining precious metals (silver, palladium, and platinum) marked solid and respectable gains on the day, with all trading at least 1% higher. However, dollar strength bit into earlier gains in gold, which had traded to a high today of $1,282.30, before backing off and closing $2.30 lower, which took current pricing of February futures to $1,269.50 per ounce.

Wishing you as always, good trading,