The good thing about Wall Street is that you get a Christmas break. Wheather you want one or not. The market dies around Christmas and not that much fun trading.

WHO IS TRADING

I was watching the S&P E-Mini trading Christmas eve, and it was scarily slow. The last few minutes had a lot of closing trades, but I think trading was by two groups.

[1] Computers. They don’t care about Christmas anyway. A data feed is a data feed.

[2] People who can’t make it home for the holidays. This also includes those foreigners who have not figured out that Christmas is a big deal to the Americans.

Come to think of it, they are pretty much the same group anyway.

WHAT NOT TO DO OVER XMAS

Well. Don’t trade. Markets are much ‘thinner’, than usual an makes a lot of funky moves. By ‘thinner’, I mean the volume is less than usual.

Apple Computer , which usually does somewhere in the 30M ~ 40M range only did about a fourth of that on Christmas eve.

When the markets are thin like this, it is best just to take a break. Spend time with the in-laws and watch the kids fight over toys.

Hello, Santa ? Where is my rally ?

From http://wulffmorgenthaler.com

Advanced Micro Devices ( AMD ) is cheaper than a two dollar ????. i really want to buy AMD at this price. Why don’t I? Not in my plan. One thing I have learned is to stick to what you know.

AMD at sub $2 is bankruptcy priced. If AMD does not go bankrupt, this stock could easily go up 10 times. Bankrupt, it goes to zero.

One thing I have learned is stick to the type of trading that you know, and that is not gambling, which is what this trade is. Gambling.

AMD seems to have found support, as long as they do not go bankrupt, it should be ok. That is a big if.

So I will stick to my rules and pass on AMD.

Not the best Christmas present, but they are done. I just saw them at a futures convention and they gave me a butt ugly orange hat. I guess I should have known something right then and there.

From the WSJ

DECEMBER 24, 2008

End of Line For Futures Exchange

By DOUG CAMERON

The head of the U.S. Futures Exchange said Tuesday that it would be closed down after no buyers emerged for the Chicago-based trading platform.

The future of the USFE was called into question last week when MF Global Ltd. said it was seeking buyers for its 48% stake, setting a Dec. 31 deadline.

John Spiegel, chief executive of the USFE, said lack of time and adverse market conditions had seen no buyers emerge for the MF Global stake, prompting the decision to wind down.

Mr. Spiegel said it “would be very doubtful at this point” if buyers could be found for any of USFE’s assets, including its exchange license from the Commodity Futures Trading Commission.

“When the exchange goes dormant, the license is useless,” he said.

The closure marks the third time that USFE, under different guises and owners, has failed to break the industry mold with both mainstream and specialist products since its launch in 2004.

MF took effective control two years ago in an effort to spur the product innovation that former Chief Executive Kevin Davis believed was lacking at established exchanges.

“I think we’ve achieved a lot over the year,” said Mr. Spiegel, who oversaw 16 staff from USFE’s head office in the Chicago Board of Trade building.

He said USFE’s “credibility had been called into question” early on, with brokers uneasy about using an exchange whose ownership included one of the sector’s heavyweights.

The rogue-trading scandal and financial communication issues that dogged MF Global and cost Mr. Davis his job also weighed on the exchange, said Mr. Spiegel.

Smaller stakes in USFE are held by Man Group PLC and U.S. Exchange Holdings Inc., a unit of the Eurex derivatives arm of Deutsche Börse AG.

If the housing meltdown has not sealed the Chicago School of economics fate, I do not what will.

I remember have a lively discussion about this with some newly minted MBA’s years ago. We always need those guys to be on the other side of our trades.