EB Daily Market Report - Brief Update - Tuesday, December 31, 2024

This is our last, and brief, market update for 2024.

Major indices are mixed to end the year, with a bit of relative strength among small and mid cap stocks. The Volatility Index ($VIX, +0.75%) remains elevated and above 17 to close out 2024. Mostly value-oriented, dividend-paying stocks are leading our major indices during the last trading day of the year. 6 sectors are higher and 5 are lower. Energy (XLE, +1.35%) is moving towards short-term resistance at its price resistance (87.11) and the declining 20-day EMA, currently 86.85. Meanwhile, the XLE held support in the 82.00-83.00 range, so the question here is now rather obvious. Does early January result in a short-term bullish breakout above 87.11 or a short-term bearish breakdown below 82.00?

Technology (XLK, -0.67%) is off its earlier low of 231.76 and is above its recent short-term candle-body low of 230.53, but it is today's weakest performing sector. Growth (IWF, -0.58%) and value (IWD, +0.11%) are heading in opposite directions, but I wouldn't read too much into that. Value does tend to perform quite well on a relative basis when our major indices consolidate or roll over, even during a very short-term period of weakness.

Early January can provide us some clues about the year ahead and the entire month of January (January Effect) has a strong correlation with the balance of the year, so we'll be assessing all of that in addition to the many topics to be discussed at MarketVision 2025. I hope everyone is able to join us on Saturday, or at least check out the recording.

Be safe tonight and I'll be back on Thursday to open up 2025.

Happy New Year!

Happy trading,

Tom