We began our Santa Rally on the 26th with a nice rally day as Santa’s sleigh easily lifted off, but those tired reindeer were not able to sustain and we have drifted lower than the post-Christmas open. Not much of a rally.
For those that don’t know about the Claus rally, here is a post copied from Investopedia:
What Is a Santa Claus Rally?
A Santa Claus rally describes a sustained increase in the stock market that occurs in the last week of December through the first two trading days in January. There are numerous explanations for the causes of a Santa Claus rally including tax considerations, a general feeling of optimism and happiness on Wall Street and the investing of holiday bonuses. Another theory is that some very large institutional investors, a number of whom are more sophisticated and pessimistic, tend to go on vacation at this time leaving the market to retail investors, who tend to be more bullish.
KEY TAKEAWAYS
- The Santa Claus Rally refers to the tendency for the stock market to rally over the last weeks of December into the New Year.
- Several theories exist for its existence, including increased holiday shopping, optimism fueled by the holiday spirit, or institutional investors settling their books before going on vacation.
- Regardless of the reason, more than two-thirds of the Decembers dating back to the 1960s have resulted in positive gains for shareholders.
- Still, as with many market anomalies, it may just be random and there is no guarantee it will continue into the future.
Some traders don’t believe in the rally and those same traders will not be able to hear the bell ring at 4 pm today as the markets close for another year.
Happy new year to all. Our regular Opening Print will return on Thursday.
Economic Calendar
Closing Prices
In the Tradechat Rooms
The MiM
HFT Alert
We had several program trades detected during the day. The morning opened sharply down with two distinct legs. At 10:13 am ET the alerts went off with a high-grade sell program. That preceded the 10:15 low of the day.
That took us back up into a nice 50% retracement rally until about 1 pm where we drifted back to just above the low for the close.
Our View
A BRIEF HISTORY OF 2019
First looking at December, a nice month indeed for those invested and trading long.
From the opening day until this AM’s trade we have climbed a healthy 2.51% extending the market into all-time new highs. Bullishness breeds more bulls.
You can see the attempt in this past week to go even higher, but that most likely will not happen until we get more traders back into the ring.
Over the year:
The SP500 has gained about 28.74%. No doubt a very strong year with some mid-year testing. Those areas are worth noting as testing points for 2020 corrections.
January 2nd and 3rd should be an interesting test as we finish the week and traders return from a sustained holiday. See you all on Thursday.
Market Vitals Technical Analysis
As always, please use protective buy and sell stops when trading futures and options.
Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Decisions to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
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