STTG Market Recap Dec 21, 2012

First, from the team at Stock Trading to Go, we wish every reader Happy Holidays and want to remind you due to the half session Monday there will be no recap that day, but we’ll see you back here Wednesday.  Also if you have not already done so, please take 30 seconds to fill out our quarterly reader survey.

Some days we open the recap by saying “it was generally a quiet day on Wall Street” – today was not one of those days.  The action started hot and heavy last night after the so called Plan B by John Boehner failed to muster enough votes by the GOP to pass, sending Congress to an early holiday.  The market did not take the news well as it indicated that Boehner did not even have control of his own party.  Futures essentially flash crashed dropping some 40+ points in about a minute.  Thankfully there is a limit in the overnight session, so the maximum futures can drop are 50 points.  Buyers stepped in and about half of those losses were erased very soon.  All this happened before 10:30 PM last night.

Today the market gapped down sharply and worked its way back slowly for most of the session.  While there were still significant losses they were nowhere near as bad as the futures session.  The S&P 500 fell 0.94% and the NASDAQ 0.96%.  These losses did however wreck some havoc with the technical outlooks for the indexes which were looking quite fruitful just 24 hours earlier.

After breaking over their respective early November highs mid week, both major indexes fell back below Friday.  While it would have been preferable that not happen, since this was due to a news event rather than daily operation of business it could possibly be excused if this can be reversed rather quickly in the days to come.

Research in Motion (RIMM) reported after the bell yesterday and was crushed today after weeks of excellent price action.  After running so much in a short period of time, the report (and guidance) had to be perfect and they weren’t.

  • At issue is the fee RIM charges consumers and companies for access to its network to help traffic run faster and make customer data more secure. Those fees used to make up about 15% of RIM’s total revenue, according to Sterne Agee analyst Shaw Wu.   With sales of BlackBerry devices in decline, service fees now makes up more than 35% of RIM revenue, making it a more important component of the company’s business. That’s why the uncertainty over the future of that revenue stream with the BlackBerry 10 rattled nerves on Wall Street

As we look to commodities, oil – which was showing signs of life this week – fell back into its multi month range.

Precious metals had a very tough week – gold was bad, but silver was horrid.

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