I just got back into town late Thursday so today’s report will be brief.
As well there is little to comment on.
Markets produced a divergence on Wednesday with the SPX striking a record high with the QQQ still below a Tops Line connecting the October 29 high and the December 5 high.
Nearly all activity reflected year-end window dressing and tax-related positioning rather than any meaningful shift in trend.
As such Wednesday’s action as well as todays offers little real insight into the markets agenda.
Trading volume and participation are expected to be abnormally light as many institutional desks are closed or minimally staffed.
As a result, any price movement that does occur is unlikely to be technically meaningful.
That said, the limited activity we do see likely will carry a positive bias, driven by year end window dressing rather than genuine demand or improving breadth.
Given these conditions, Wednesday’s tape should be viewed with a healthy dose of skepticism.
Narrow leadership, low liquidity, and holiday effects tend to distort signals, often masking the underlying trend rather than clarifying it.