Despite this drop to start another holiday-shortened week, the major indices are poised for a fourth straight month of gains as we prepare to bid adieu to 2019.
The NASDAQ slid back under 9,000 on Monday by slipping 0.67% (or more than 60 points) to 8945.99. Also, the Dow declined 0.64% (or around 183 points) to 28,462.14 and the S&P was off 0.58% to 3221.29.
Such a pullback – as modest as it may be -- still feels rather surprising after the record-setting pace we’ve been on since the Phase 1 deal was agreed to in principle a few weeks back.
And now it looks like the deal may finally be signed, perhaps within the next week or so. Reports say a Chinese delegation, including our good friend Vice Premier Liu He, is coming to Washington.
But stocks still dropped as investors make preparations for the New Year. Several of the editors have been waiting for the market to give a little back amid its historic run higher.
Most importantly, though, the NASDAQ is up by more than 3% in December heading into the final day. Meanwhile, the S&P is up 2.6% this month and the Dow has advanced about 1.5%.
In addition to being the fourth straight month of gains as mentioned earlier, it also marks the 10th month in the green in 2019!
Needless to say, stocks are about to wrap up a very strong year. The NASDAQ is up around 35% in 2019 with one more day to go, while the S&P has jumped nearly 30% and the Dow has advanced approximately 22%.
That’s pretty good for a year that many feared would see a recession just a few months ago.
Today's Portfolio Highlights:
Counterstrike: The idea behind adding Velocityshares 3X Long Crude Oil ETN (UWT) on December 9 was to make a short-term move that would take advantage of a nice setup for oil. And it worked out just as expected! Crude reached $62, which meant this triple leveraged ETF jumped double digits. Jeremy thinks it could slip before moving higher again and he doesn’t want to give up any of the profit. Therefore, he sold UWT on Monday and collected a nice 14.3% return in less than a month. The editor also sold USANA Health Sciences (USNA) for 5.7% in about 2 months.
TAZR Trader: As far as Kevin is concerned, you can’t have too much exposure these days to companies that fight against cyber threats via Security-as-a-Service. The portfolio already has Proofpoint, and today it added Zacks Rank #2 (Buy) CrowdStrike (CRWD). Shares of this cloud-delivered endpoint correction company dipped after its quarterly report earlier this month, despite beating expectations and providing a solid guidance. But the editor notes that a potential turn is on the horizon, as new and willing buyers are stepping up to replace the IPO investors that are getting cold feet after hanging onto this name for more than 6 months now. Kevin added CRWD on Monday with a 7% allocation. Read the full write-up for more on this new pick, including what the institutional investors are saying about it.
Black Box Trader: The portfolio sold four names in this week's adjustment and all of them were positive, including a double-digit winner. The stocks that left the service today were:
• Tesla (NASDAQ:TSLA, +22%)
• DICK'S Sporting Goods (DKS, +7%)
• Charter Communications (NASDAQ:CHTR, +0.6%)
• Arconic (ARNC, +0.2%)
The new buys that filled these spots include:
• Accenture (NYSE:ACN)
• Builders FirstSource (BLDR)
• Invesco (IVZ)
• Raytheon (NYSE:RTN)
Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.
Insider Trader: "Given the huge rally in stocks over the last month, its not surprising to see some profit taking heading into the final 2 days of the year. The bulls have been running on fumes for a while now.
"But its been such low volatility the last few weeks, today’s sell off seemed worse than it actually was.
"Have investors gotten too complacent?
"We will see later in the week when the calendar changes. Its also really low volume trading so we can’t read too much into it.
"The Santa Rally continues through the end of this week." -- Tracey Ryniec
All the Best,
Jim Giaquinto
Recommendations from Zacks' Private Portfolios:
Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>
Zacks Investment Research