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No Christmas cheer on Wall Street, DJIA marks worst Christmas Eve in history

  • DJIA, was finishing 653 points, or down by 2.9%. 
  • The S&P 500 fell by 2.7% 
  • Nasdaq Composite Index COMP dropped 2.2% loss.

U.S. indices ended on Christmas Eve at 1 p.m. Eastern Time and will stay closed on Christmas day. The Dow Jones Industrial Average DJIA marked its worst Christmas Eve in history being the first time it has lost over 1% in about 100 years while investors fret over tighter money conditions due to the Fed's persistent path of higher rate trajectory, much to Trump's displeasure.  At the same time, we have ongoing trade war concerns with the dispute between the US and China which is weighing on the prospects for both domestic and global growth in general. Meanwhile, political unease in European markets are also taking their toll and the latest domestic political stress comes with the US partial government shutdown that could continue into January. A tweet from Treasury Secretary Steven Mnuchin has alarmed investors about liquidity issues. There were reports over the weekend of crisis talks between Treasury Secretary and major central banks which added to the concerns and weighed on risk further. However, as that dust settles, it turns out that crisis talks might b a good thing after all as seen as preventative rather than a state of emergency.

The Plunge Protection Team

Today, Mnuchin is convening the president’s working group on financial markets, AKA, the  "Plunge Protection Team" which is a group that includes 

The Secretary of the Treasury, or his or her designee (as Chairperson of the Working Group);
The Chairperson of the Board of Governors of the Federal Reserve System, or his or her designee;
The Chairperson of the Securities and Exchange Commission, or his or her designee; and
The Chairperson of the Commodity Futures Trading Commission, or his or her designee.
The group was created following the stock market crash of October 1987 and met in 2009 in the latter stages of the financial crisis.

DJIA levels

Indicators stay bearish into oversold territory although with ATR increasing. The price has now pierced 21818 S2 and there are no signs of consolidation or reversion. If there is a correction, the pivot at 22697 would be a target. However, on an extension, the index can head to 21260 as S3. 

Support levels: 21600 21260 21000

Resistance levels: 22139 22697 23018
 

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