Market Overview

Recapping The Market's Crazy December

Recapping The Market's Crazy December
Related SPY
Pres Trump Says Right Now We Are Not Discussing Dropping The Charges Against Huawei
Trump Says The Relationship Has Been Good, But Who Knows Whether A Deal Will Be Made
The Week In Review: Durable Goods Slows (Seeking Alpha)
Related DIA
A Peek Into The Markets: US Stock Futures Edge Higher Ahead Of Economic Reports
This Day In Market History: North American Land Company Is Formed, Precursor To The Modern-Day REIT
The Week In Review: Durable Goods Slows (Seeking Alpha)

December was one of the wildest — and worst — months of trading in the U.S. stock market since the 2008 financial crisis. Here’s a look back on one crazy month of trading.

Sinking Like A Stone

The S&P 500 started the month at around 2,800, but it essentially dropped like a stone for the first three weeks of the month, eventually dipping into bear market territory and making new 52-week lows on the worst Christmas Eve in market history.

The S&P 500 bounced back in the closing days of the month after briefly dipping as low as 2,346.

Unfortunately, some major technical damage may have already been done. The S&P 500 sell-off triggered a bearish death cross in its 50-day and 200-day simple moving averages in the first week of December, and its break below 2,600 took out a major support level that had held in both October and November.

Extreme Volatilty

But it wasn’t just the new lows that spooked investors; it was the extreme volatility. The BRCL BK IPTH S&P 500 VIX SH FTRS ETN (NYSE: VXX) spiked 38.5 percent in the month. Incredibly, the SPDR S&P 500 ETF Trust (NYSE: SPY) had three of its 10 largest single-day declines of the past three years in the month of December, including a 2.6-percent drop on Dec. 21, a 2.6-percent drop Dec. 24 and a 3.2-percent single-day decline Dec. 4.

The S&P 500 had its largest single-day point gain in history when it jumped 116.6 points Dec. 26. In percentage terms, the 4.96-percent gain was the eighth best day of trading for the index of all time and its best single day since March 2009.

After a volatile month, here’s a look at how some popular index ETFs fared overall now that the dust has settled on a wild December:

  • SPY ETF was down 9.8 percent.
  • SPDR Dow Jones Industrial Average ETF (NYSE: DIA) was down 9.1 percent.
  • PowerShares QQQ Trust, Series 1 (NASDAQ: QQQ) was down 9.4 percent.

Key Levels

Looking ahead to January, traders will be watching several key technical levels: 2,600 will likely be a major resistance point given that it was support for more than two months. The December lows at around 2,350 will be a key support level and could be the only place the market finds buying support above the 2,000-2,200 levels at which the S&P 500 traded for most of 2015 and 2016.

Related Links:

The Best And Worst Stocks Of 2018

A Recession In 2019? Analysts Aren't Convinced

Posted-In: Technicals Trading Ideas General Best of Benzinga


Related Articles (DIA + QQQ)

View Comments and Join the Discussion!

Height: Post Office's Strong Liquidity Makes Immediate Crisis, Changes Less Likely

Ferry Deals Aim to Alleviate UK Port Congestion After Brexit