Santa Rally and the Market

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Santa Claus Rally

This is a historical belief and has a trend to back the faith. The stats show that from 75% to 80% of the time, the market rises. What many do not know is the time period. It is not "before" Christmas, but the last five trading days of December and it includes the first two trading days of January. 

This time schedule overlaps another highly followed belief, the January Barometer. The time period of this thinking which many are convinced, calls for the entire first month in time. It mainly points to the S&P 500. If for the entire month, the index is up and ends positive, this says the entire year will be positive for trading. Conversely, if the trend is negative and ends downward, this says it will be a poor year for trading.

Fed Meeting  

The decision on the 10th of December will have a direct impact for the remaing month and the two hypothesis above. At present, the market believes a rate cut is coming. We already told you that people are jockeying for the chair title, including the present chairman who also wants to retain the job. We know President Trump changes his thinking from day-to-day. The decision and who voted which way will influence the president's choice. Powell's term ends on May 15th 2026.

Meanwhile...

We see King $Dollar staying strong as it bounces around .99 to 100. If there is a rate cut, it should fall. The first resistance is .98 and then, .96. The precious metals could attack its last high. They have also stayed strong despite a strong dollar. 

If you look closely at the market, there is distribution taken place. Many firms are falling sharply. The charts of Target (TGT), Costco (COST) and Comcast (CMCSA) are all scary. 

If you look at the economy, job losses are announced every week. The latest is Hewlett-Packard (HP) who are cutting 4,000 jobs. Then, we have internal problems with our utility sector. Data centers are eating electricity. This is raising the costs for energy in regions where new locations are being built or operating. Patrick Donnelly, a senior at the Institute of Engineering says, "Data centers are like the electrical needs of 10,000 homes." We say, "Peace."