Stocks Still on Pause as Year Winds Down

The Dow Industrials, NASDAQ, and the S&P 500 each closed lower for the fourth time in the past five sessions.

In normal times, this kind of market action would be characterized as "distribution," a code-word for institutional selling, and maybe that's exactly what it is. As the Fed and other central banks have flooded markets with liquidity, the past nine years have been anything but normal, however, so these past few days could be better explained as "turning off the computers" as stocks have reached an exhaustion level.

It's also the week between Christmas and New Year, a time for friends, family, and a generally-accepted laid-back attitude toward work. Anybody who has worked for a living knows the value of down time, and that's probably what this little pause is all about. There's no need to delve further into the ether, trying to discern a pattern or conjure up an explanation. That would be just the kind of imaginative speculation that leads to bad investment decisions.

While the market has yet to make any meaningful moves to the downside, this little spat of sluggishness is probably nothing more than the result of non-chalance than anything else.

When stocks take a deep dive of more than two percent over a number of sessions, or technical levels are violated, only then may more analysis be deemed advisable. For now, it's better to have a hot toddy or two, relax with friends and family and let the markets sort themselves out over the final three days of trading, reeling from what was previously a torrid pace.

At the Close, Tuesday, December 26, 2017:
Dow: 24,746.21, -7.85 (-0.03%)
NASDAQ: 6,936.25, -23.71 (-0.34%)
S&P 500: 2,680.50, -2.84 (-0.11%)
NYSE Composite: 12,808.90, +11.46 (+0.09%)