Where's Santa's Rally?
By now, the fabled Santa Claus rally should have pulled stock prices up despite themselves. Even in years where stocks were sick with a fever lying in bed, we've had year-end rallies that put a respectably cheerful holiday cap on the patient. But here we are, the Monday before Christmas, and the rally's been, to say the least, disappointing. When the Fed announced its price increase last week, stocks did shoot up for a day. A slew of happy pieces crossed our desks reminding us that history shows that stock prices typically rise at the beginning of Fed rate increases. That's true. They rise for a bit, and for those who would play the odds, money can be made for a spell. But eventually the subsequent rate increases push prices down.
Of course, there's still time. After all, it's the 21st; Christmas arrives on the 25th; and there are still a few trading days before the year ends the week after. Yes, hope springs eternal that Santa may simply have gotten a late start this year of 2015. And if old patterns hold true, trading volume will decrease this week as traders begin taking time off for the holidays. With lower volume, prices - at least those of the big averages - can more easily be manipulated up (or down), with a bit of effort. Maybe the government's team dedicated to keeping market prices stable (which usually means propping them up) will put in their large orders in the futures market pushing the futures up, thereby creating a short-term opportunity for traders to jump in and scalp a few holiday profits.
It could happen. If it does, we'll calmly watch from the sidelines. What will you do? Whatever you do, good luck. In the grip of government manipulation and traders' frenzy, you'll need all the luck you can get to net a profit before the rug is pulled out from under you. And that's basically why the sidelines look so enticing at the moment.
What's that you say? We're playing the short-term trend here by getting out and staying out of the stock market for now? Shouldn't we be looking long-term? Well, the year's been a nasty one in so many ways for so many of us. Being in cash would have been the preferred and best allocation all around. Who knew? So rather than try to make up for any losses in these last few days - and risk the possibility of further losses - we've licked our wounds and have decided a bit of respite from the whipsaws of price volatility would be the wiser choice. Combined with our concern for stock prices in the longer-term, you can see why stepping aside seemed the compelling choice. But that's just us.
We conclude our days-before-Christmas thoughts with this little limerick:
Of course, there's still time. After all, it's the 21st; Christmas arrives on the 25th; and there are still a few trading days before the year ends the week after. Yes, hope springs eternal that Santa may simply have gotten a late start this year of 2015. And if old patterns hold true, trading volume will decrease this week as traders begin taking time off for the holidays. With lower volume, prices - at least those of the big averages - can more easily be manipulated up (or down), with a bit of effort. Maybe the government's team dedicated to keeping market prices stable (which usually means propping them up) will put in their large orders in the futures market pushing the futures up, thereby creating a short-term opportunity for traders to jump in and scalp a few holiday profits.
It could happen. If it does, we'll calmly watch from the sidelines. What will you do? Whatever you do, good luck. In the grip of government manipulation and traders' frenzy, you'll need all the luck you can get to net a profit before the rug is pulled out from under you. And that's basically why the sidelines look so enticing at the moment.
What's that you say? We're playing the short-term trend here by getting out and staying out of the stock market for now? Shouldn't we be looking long-term? Well, the year's been a nasty one in so many ways for so many of us. Being in cash would have been the preferred and best allocation all around. Who knew? So rather than try to make up for any losses in these last few days - and risk the possibility of further losses - we've licked our wounds and have decided a bit of respite from the whipsaws of price volatility would be the wiser choice. Combined with our concern for stock prices in the longer-term, you can see why stepping aside seemed the compelling choice. But that's just us.
We conclude our days-before-Christmas thoughts with this little limerick:
According to Wall Street's old banta
Stock markets can rise thanks to Santa
But prices won't rise
Despite St Nick's tries
Conclusion (so far): they just canta
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