Recapping The Market's Crazy December

December was one of the wildest — and worst — months of trading in the U.S. stock market since the 2008 financial crisis. Here’s a look back on one crazy month of trading.

Sinking Like A Stone

The S&P 500 started the month at around 2,800, but it essentially dropped like a stone for the first three weeks of the month, eventually dipping into bear market territory and making new 52-week lows on the worst Christmas Eve in market history.

The S&P 500 bounced back in the closing days of the month after briefly dipping as low as 2,346.

Unfortunately, some major technical damage may have already been done. The S&P 500 sell-off triggered a bearish death cross in its 50-day and 200-day simple moving averages in the first week of December, and its break below 2,600 took out a major support level that had held in both October and November.

Extreme Volatilty

But it wasn’t just the new lows that spooked investors; it was the extreme volatility. The BRCL BK IPTH S&P 500 VIX SH FTRS ETN VXX spiked 38.5 percent in the month. Incredibly, the SPDR S&P 500 ETF Trust SPY had three of its 10 largest single-day declines of the past three years in the month of December, including a 2.6-percent drop on Dec. 21, a 2.6-percent drop Dec. 24 and a 3.2-percent single-day decline Dec. 4.

The S&P 500 had its largest single-day point gain in history when it jumped 116.6 points Dec. 26. In percentage terms, the 4.96-percent gain was the eighth best day of trading for the index of all time and its best single day since March 2009.

After a volatile month, here’s a look at how some popular index ETFs fared overall now that the dust has settled on a wild December:

• SPY ETF was down 9.8 percent.
• SPDR Dow Jones Industrial Average ETF DIA was down 9.1 percent.
• PowerShares QQQ Trust, Series 1 QQQ was down 9.4 percent.

Key Levels

Looking ahead to January, traders will be watching several key technical levels: 2,600 will likely be a major resistance point given that it was support for more than two months. The December lows at around 2,350 will be a key support level and could be the only place the market finds buying support above the 2,000-2,200 levels at which the S&P 500 traded for most of 2015 and 2016.

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