We expect today to be a sleepy session after what has been a wide awake 2011. We’ve seen tremendous volatility and while that volatility has tapered off some recently its a theme we expect to reemerge in 2012. There won’t be much to draw on from the final trading day of 2011 but where the market finishes could have some psychological implications moving forward.
The 1,258 level is the one to watch as that is the year to date break even on the S&P500. Should SPX manage to eke out a close above it the bulls will at least be able to say to themselves that even with all the volatility in 2011, they still managed green close. The bears on the other hand will certainly be looking to grab the reigns. Bears are hoping to boast about the first down year in SPX since 2009 and set up an even worse year for 2012.
In the end though tomorrow will be just another day, except that it is the last one on the calendar trading year for 2011. Regardless of what happens we probably won’t be able to draw many conclusions. What we do know is that the S&P has managed a series of higher lows since the October 1075 bottom and also accomplished the feat of putting in a higher year low, refusing to even test its 2010 summer lows. The flip side of that of course is that a series of lower highs have put in as well and key sectors are failing to lead the market higher. 2012 should be an exciting year, and we’re only 1 day away from witnessing how it will all unfold.
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- SH @ the bell 12/27/2011: S&P500 back in the black for 2011