The market endured its fifth straight losing session on Tuesday after a couple of gloomy economic reports set the tone for the day. The Dow managed to get off to a good start and traded to a high of 8,600 before falling 100 points, to close at 8,419. So much for the Santa Claus Rally.

The Nasdaq dropped 11 points to finish up at 1,521. The S&P 500 gave back 8 points and settled at 863. Trading volume has been light this week as many on Wall Street are on vacation for Christmas. Expect an even lighter day today as the market closes at 1pm EST.

Back to Economics 101. The most disturbing economic report was the fact that sales of new homes fell to the slowest pace since 1990, while prices of new homes dropped by the biggest amount in eight months.

Sales of existing homes fell nearly 9% in November to an annual rate of 4.5 million from a downwardly revised pace of 4.9 million in October. Naturally, the numbers were off and basically means we’ve got an 11-month backlog. I don’t see a turnaround in housing until next summer but with mortgage rates starting to pop up under 5%, we could get a wave of new first-time buyers.

Feeling left out, the Commerce Department also wanted to be the bearer of bad news as it chimmed in saying 3Q gross domestic product fell at an annual rate of 0.5%.

Oil prices dipped below $38 a barrel and there’s talk they could be headed below $30. I’m not sure what the Vegas over/under is for oil but there are many on Wall Street that see the recession worsening (really?). People are driving less and staying home more often. With winter in full force, I’ll take the under.

And if you hear folks talking about gas falling below $1 tell them you got the scoop. Oil would need to get below $20 for that to happen so if we can get to $30 we could see $1.25 for gas, depending on where you live of course.

With the market closing early, I wanted to take this time to wish everyone a Happy Christmas! Thanks to all of you who continue to read the blog and send me emails. If you haven’t sent me an email, again, my inbox is always open to any questions you may have about options or the market in general.

Ho, Ho, Ho, I’ll be back Friday!

Rick Rouse