Page menu

Friday, January 3, 2025

Santa Rally Comes Late

I pretty much just use this blog as a means to highlight what I'm calling out on Twitter/ X, so you'll be better off checking my timeline over there, if you're looking for a trade. I also have several hedge funds who are following me, and they like to take the opposite side of every trade I call, so also keep that in mind, when following me. 

First off - from Investopedia:

Santa Claus Rally: What It Is and Means for Investors 

The Santa Claus rally specifically occurs during a seven-day period spanning the last five trading days of December and first two trading days of January, with historical data showing positive returns about four-fifths of the time

 So, if you go by the historic dates for a Santa Rally, we're running a little late, and I think the reason for this is that Money doesn't get put to work until the first Monday of the month. It would be an interesting study to figure out how that factors into the Santa Rally equation.

This year we saw stocks top out ahead of the New Year, and profit taking ensued, and that continued into yesterday, with a heap of bad news (real or imagined).   

Yesterday felt like a Monday, and traded much like a Monday, since traders are still returning from vacation. 

We saw the rug pulled on the market immediately after the open. 

 

This is what the smart money does. They shake out the retail investor. That's you.

I don't usually announce when I'm taking profits, because I'm not always right, and I don't want to negatively impact your trading style. 

Yesterday was the exemption, when I saw the $VIX spiking in the middle of the day, again. 

  This type of shakeout is typically what you see, just ahead of real money being put to work at the beginning of the year.

Not to brag, but I read markets in real time, like a boss, and unless you were following my timeline, you're going to miss 90% of my tweets anyhow.  

My take on the Market, going into yesterday's close: 

 I explain why markets can no longer correct in my 2024 wrap-up. 

Futures Higher This Morning

One of my secrets to being right all the time, is because I'm usually up early reading markets, and weeding out the real news, from the fake news, and as slow as the hedge funds are to complete a cycle nowadays, I can read these markets like a book. It's hardly even a challenge anymore. Maybe at some point we'll get some real news that can move markets, but that remains to be seen. 

Here's an for example: 

The retail investor sees WWIII trending and Israel at war, and Ukraine/ NATO/ Joe Biden & co fighting a proxy war with Russia, and of course this looks bearish, right? Wrong. 

These are energy wars

1. Israel - for example - is trading at all time highs. Chart the $TA125 for yourself... 

2. We just completed our first LNG shipment to Ukraine. Google it

Getting back to yesterday's trade: 

We did see a little follow through on Pot Stocks up another 7%, but they continue to struggle around that $4 level - on the $MSOS. Perhaps it's going to take an earnings report to propel the sector higher? 

Crypto had a nice run, as expected. 

Gold miners were higher - a trade I forgot to mention in the last update. 

 As I stated above and predicted ahead of the new year, I'm expecting to see another sector rotation, out of energy, and back into tech. 

GL, AA


Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)