A low-volume market melt-up during the holidays where participation is light and there are no eager sellers to be found always provides its own brand of entertainment ahead of the New Year’s Eve festivities. The lack of volume also brings up the possibility of a natural air pocket developing when participation levels return to normal, at which point sellers may decide to frolic into the fray. As we push further into the year 2 A.C. (after covid) and the western New Year, it may be helpful to keep this in the back of your mind.
All we know for sure is that after a sharp four-day melt-up off the lows of two Mondays ago, the final four days of the trading year marked a point at which the forces of low-volume buying were met with an equal if not slightly greater amount of low-volume selling. This created a four-day pullback/consolidation as volume increased slightly into year-end. For now, the S&P 500 remains the only major market index to set foot on terra nova, new-high price ground, after the Dow failed on a breakout attempt on Thursday.