Not Too Slow for Another New High

Validea Peter Lynch Strategy Daily Upgrade Report - 12/9/2017

Volume was about as slow as molasses in wintertime on this penultimate session of 2017, but the Dow still managed to report its 71st record close of the year. The index only had to advance by 0.26% to make new history at 24,837.5. The two other major indices also increased on the day, as the S&P improved 0.18% to 2687.5 and the NASDAQ rose 0.16% to 6950.2.

“Watching the paint dry comes to mind when looking at this market. It was another slow day as most of the action didn’t happen until the end of the day ramp up,” said Dave Bartosiak in Momentum Trader and Surprise Trader . “With tomorrow scheduled for another half day, and Monday being a Holiday, I don’t expect anything different.”

Now we head toward the final trading day of a sensational year in the market. It would be great to finish 2017 with a huge rally, but most folks are thinking about the New Year coming up. Expectations for 2018 are high, especially since tax cuts are now real and the jobs picture remains robust. However, it would be tough to outperform this year. But a portfolio’s performance can always be better, so you can bet that the editors are preparing to outdo themselves in the New Year.

But there’s still some business to take care of. On Thursday, TAZR Trader picked up an industrial name and added more to an existing position. Learn all about these moves in the highlights section below, along with some excerpts from other portfolios.

Today’s Portfolio Highlights:

TAZR Trader: Kevin has been looking to add another industrial name to this tech-heavy portfolio, and today he made good by taking a 5% “starter” position in Kennametal (KMT). This Zacks Rank #1 (Strong Buy) mid-cap supplies tooling, engineered components and advanced materials to industries like aerospace and energy, among many others. The editor has been watching KMT for a while due to its rich history and impressive turnaround. And now more firms are paying attention due to its well-received Analyst Day. Kevin thinks the stock will follow bigger names (ITW, SWK, HON, URI) to new highs in this thriving sector, and would add more shares on any pullback. By the way, he also increased the portfolio’s allocation in CyberArk Software (CYBR) by 3%. Learn a lot more about all of today’s moves in the complete commentary.

Counterstrike: “Back in front of the screens today, but I did very little trading. Not because I didn’t want to, but because the market barely moved. As we head into the final day of the year tomorrow, I would expect markets to remain very quiet, perhaps drifting higher.

“I would suggest most traders take the day off and use the extra day to prepare mentally for 2018. It’s never fun losing money on the last day of the year and if this low volume environment continues into tomorrow, there won’t be much money to be made.

“I don’t see a lot happening tomorrow. Energy is strong, tech is a bit weak and the crypto space seems to be selling off a bit. However, the last day of the year can be strange sometimes. Funds like to “window dress” to make returns look better. This involves buying up stocks on the last day of the quarter so they can show a higher percentage return. I’m not sure we will see that this year, as the returns are already good.” – Jeremy Mullin

Options Trader: “Just one more day left (half day actually) and 2017 will come to a close.

“In spite a relatively slow day, there were several economic reports out. Weekly Jobless Claims were unchanged from the previous week at 245,000. New Claims continue to hover near the expansion lows. Wholesale inventories were up 0.7% while retail inventories were up 0.1%. Analysts noted that both readings, which improved from their last time out were ‘both positives for GDP’.

“And the Chicago Purchasing Managers Index surged to its best reading of the year 67.6. In fact, it was the best reading in 6½ years. And the production component now stands at a 34-year high.

“The market proved a lot of pundits wrong this year. But we have been bullish all year long. And I expect another fantastic year again next year!” — Kevin Matras

Until Tomorrow,
Jim Giaquinto

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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