Friday, December 30, 2011

After drifting down on low volume yesterday, we drifted back up and recouped most of those losses today.

AMZN and precious metals saw a little panic selling early, but the dip buyers jumped in and had them well off their lows by the close. Leadership by banks was probably the most surprising aspect of the action today, but it's a mistake to draw serious conclusions from this thin, whippy, end-of-year trading.

The most important thing to keep in mind is that just because it's the end of the year, that doesn't mean stocks will necessarily hold up. It isn't unusual to see profit-taking as money managers book gains and position for the new year. Many traders like to start a new year with high levels of cash and will clean the slate on the last day of trading.