The Republican tax plan and bitcoin/blockchain continued to dominate headlines this week, while traders also kept an eye on Congress's attempts to avoid a government shutdown. The Dow Jones Industrial Average (DJIA) on Monday notched its 70th all-time closing high of 2017, tying 1995 for the record, but so far has failed to make history the rest of the week. Against this backdrop, the collective optimism on Wall Street approached fever pitch ahead of a holiday-shortened week, sending up a rare sentiment signal not seen in five years.
The GOP tax bill was passed on Wednesday, following two votes from the House. The bill was signed into law by President Trump on Friday, though it looks like Wall Street may be "selling the news." Several companies vowed to boost wages with their tax-bill savings, while analysts said these 3 telecom stocks and this mid-cap drug stock have much to gain from tax reform.
"Blockchain" was among the buzz words of the week, with several companies attempting to cash in on bitcoin mania. Wall Street rookie Longfin (LFIN) skyrocketed more than 1,000% a week after going public, after the company purchased blockchain-powered Ziddu.com. Net Element(NETE) stock, meanwhile, more than tripled on Wednesday, after the firm debuted a new blockchain-focused business unit. Even Long Island Iced Tea (LTEA) tossed its hat in the ring, renaming itself Long Blockchain. However, a massive plunge in bitcoin on Friday took several cryptocurrency-related stocks down with it.
Amid the bitcoin brouhaha, options traders have been paying up for "crash protection" on gold exchange-traded funds (ETF) like the VanEck Vectors Gold Miners ETF (GDX), as noted by founder and CEO Bernie Schaeffer. However, we're now approaching the historically best time of the year to buy gold, which could present an opportunity for option bulls. It's also an attractive time to buy short-term options on this copper stock, as well as this pair of soaring steel stocks. Elsewhere, this oil ETF sports cheap options ahead of its worst month of the year.
FAANG stocks once again made headlines, with a rare Apple (AAPL) downgrade weighing on tech early in the week. Meanwhile, analysts offered five reasons to fear Facebook (FB) stock in 2018, and option bears circled Netflix (NFLX). Outside of the FAANG sphere, Finish Line (FINL) picked up steam after earnings, while our Nike (NKE) options traders cashed in ahead of an earnings dip.
Looking ahead, it's a quiet four-day week for earnings and economic data. However, there are plenty of opportunities for traders. The S&P 500 Index (SPX) tends to outperform in the last two weeks of December, and these 25 stocks could rally next week, if past is prologue. Meanwhile, traders may want to sell these 25 stocks before Christmas. Plus, as alluded to earlier, the Dow has one more week to put 2017 in the record books; another all-time closing high before 2018 would be the most ever in a calendar year.