Downbeat economic data kept the market in check. Consumer confidence unexpectedly deteriorated in December, hurt by increasing worries about the labor market, while the price of U.S. single-family homes fell almost double the expected pace in October.
However, on a bullish note, a recent report showed hedge fund managers have turned extremely upbeat on U.S. equities.
The TrimTabs/BarclayHedge Survey of Hedge Fund Managers showed about 46 percent of 92 managers surveyed in the past week were bullish on the S&P 500, while only 19 percent were bearish.
"These bullish and bearish readings are the highest and lowest, respectively, since the inception of our survey in May," said Sol Waksman, founder and president of BarclayHedge.
How should you position now?
I think the hard trade is the right trade – and it’s stay long the market, says Joe Terranova. I think we may have a January that defies logic and moves higher.
I wouldn’t fight the commodity rally here because of the momentum, but the weakness in China makes me broadly cautious.
I shocked some investors when I announced I was long gold in dollar terms, adds Dennis Gartman. As far as I can tell, the trend in gold is clearly higher.
I’m long gold, silver and platinum, adds Patty Edwards. Metals are becoming a reserve currency.
FAST FLASH: AIG
The traders are keeping a close eye on AIG, with shares nearly doubling in about one year’s time.
What’s the trade?
I wouldn’t step in and buy at $56, says Joe Terranova, but I wouldn’t short this stock either.
MARKET BUZZKILL: HOMEBUILDERS
Homebuilders traded in the red Tuesday after the Case Shiller home price index fell for the third straight month to the lowest level since May.
What’s the trade?
I’m interested in shorting this space, but I haven’t pulled the trigger yet, says Steve Cortes. If Masco closes below $12.80 I’ll go short.
Dollar weakness has been the trend in recent sessions; but will the trend endure into the new year?
Don’t make a move until you hear from Kathy Lien, director of currency research at GFT Forex.
Watch the video now!