Trader Talk

Isn't it time for a down week?

Pisani's market open: Gold keeps dropping

Eight straight weeks of gains for the S&P 500. The rally is still in an uptrend, but it's looking tired. Then again, it's been looking tired for more than a week.

A fade into the close has becoming common in the last week, as the S&P 500 has been struggling at 1,800. Weakness in small caps has added to the sense of fatigue.

(Read more: Get ready for 10 percent drop in 2014: Goldman)

The good news: there is no immediate catalyst for a major decline. The bad news: any good news on an improving economy will likely be met with higher Treasury yields, which will hurt stocks.

Look at yesterday, where a strong showing in the ISM employment component proved a headwind for stocks. The bet is that we could get an upside report on jobs on Friday that could bring bond tapering back to the table.

We've had a fantastic year, with the S&P 500 up 26 percent. The consensus is for the S&P 50 at 1,900 next year. One of Wall Street's biggest bull, Adam Parker at Morgan Stanley, came out with a cute price target of 2,014...for 2014.

(Read more: Cute or bullish? Calling for 2,014 S&P in 2014)

There have been consistent buying in stock funds almost every month of the year. The Investment Company Institute said equity mutual funds have had inflows of $138 billion this year. At the same period last year there was $116 billion in outflows.

2014 will be dominated by the ability of Janet Yellen to engineer a tapering that does not blow long-term Treasury yields up enough to stifle the recovery.

Meanwhile, tapering is the gift that keeps on giving...if you're short gold. The Market Vectors Gold Miners ETF, a basket of the largest gold miners, hit a five-year low yesterday.

Rising bond yields increase the "opportunity cost" of owning gold.

And therein is a warning: the action in gold and gold stocks is proof to many that tapering is not priced in.


1) The good and bad news for Cyber Monday. The good news: sales were up roughly 20 percent.

The bad news: it was still promotional. Very promotional, the same as the stores. It was fairly common to see 50 percent off sales, exactly what we saw in the stores. Aeroposale, American Eagle, Abercrombie & Fitch, Ann Taylor, Chico's and Urban Outfitters all had 50 percent off online sales, though some had minimum purchase requirements.

Janney Capital Markets: "Retailers are getting sales and conversion, but it is at the expense of margins and profitability and is not healthy for the bottom line...the consumer continues to shop only when presented compelling promotions and discounts."

Before you get too sales are still pretty small for most retailers...for apparel retailers it's in the low double-digit. But it is growing.

2) China Mobile may have started taking preorders for the iPhone 5S, according to a screen grab from a site owned by a subsidiary of China Mobile. This has been a deal many years in the making. China Mobile has 740 million subscribers.

(Read more: Why Apple could be the big holiday shopping winner)

3) CME Group reported a significant increase in trading in interest-rate futures, but an 18 percent drop in equity index volume and a 9 percent drop in metals volume was a disappointment.

4) Japan Nikkei closed at a six-year high on expectations of more easing. One way to play Japan's rally is investing in WisdomTree's Japan Hedged Equity ETF, which strips out currency risk. DXJ closed at about a seven-month high yesterday, collecting a record $9 billion in assets so far this year.

If there was an award for ETFs, the DXJ would unquestionably be the No. 1 ETF in 2013. WisdomTree is planning to launch five new currency-hedged Japan sector ETFs, covering financials, real estate, capital goods, health care, and tech. These will be the first of their kind, offering investors exposure to specific sectors within the world's third-largest economy.

5) Nasdaq IPO: Cancer biotech Xencor (XNCR) priced 12.7 million shares at $5.50 each, in line with the price talk.

(Read more: Cramer's 6 recent IPOs with upside)

By CNBC's Bob Pisani