Market opened flattish again following yesterday’s slight losses. Volume remains the thinnest on the year. The seasonal bias is historically to the upside. Many investors and traders took the week off. This is standard for the final week of the year. It’s called the Santa Claus rally. Since 1928, the S&P 500 has averaged a 1.7% gain and traded higher 78% (69 out of 89 years) of the time through this 7-trading day period, vs. a 0.2% average gain and a 56% success rate during any other 7-day period. This year’s Santa clock started December 22nd and ends January 3rd. However, performance in the quarter has tended to be below average when the S&P 500 closed lower during the Santa Claus Rally. The S&P 500 has averaged a 1.2% loss in the subsequent 3 months following a negative SCR vs. an average 2.9% gain following a positive SCR. Hence the saying, “If Santa should fail to call, Bears may come to Broad & Wall.” That is typical, although 2017 has been anything but. Global Markets were mixed overnight. The newsflow is slow. Some companies are making some revisions post tax bill. Commodities have been catching a bid the last few months as the global economy accelerates. Copper hit a 3-year high. Crude oil has been strong, with WTI touching $60 yesterday for the first time in 2.5 years. Gold is ticking up after a choppy few weeks. These are trends that look like they could continue in 2018. There are just 3 trading days left in 2017.
Have a great morning,