Not Quite the Christmas Market

It is worth remembering that the official "Santa Rally" is still a few weeks away according to Wall Street lore: It falls during the last five trading days in December and the first two trading days in the following January.

Thus, today's weakness in many growth stocks, glaringly so in the case of PTON (in no small part due to another Citron Research bear thesis declaration), LK, WORK, and a plethora of software stock, should be taken with somewhat of a grain of salt that the market may simply be de-risking a bit in front of the FOMC later today as well as more China trade news to come before we see traders truly take off for the holidays and vacations into 2020. 

That said, a bright spot today is certainly the chips. Gauging the SMH sector ETF daily chart, updated below, we can see the semis picking up the slack for the software weakness today. This pocket of strength is a big reason why the QQQ is still green as I write this. Stocks like LRCX MU NXPI are certainly worth a look if this strength holds into the late-afternoon portion of the session. 

Overall, we have some caution in front of the FOMC, but nothing too ugly yet. In fact, if the post-Fed action into the final hour today is anti-climactic for bears I surmise that shorted stocks like TSLA should sustain even more of a squeeze into the bell.