Santa Rally & Great Gift Idea
This is a phenomenon that seems to happen every year, although there are never any guarantees. Yale Hirsch, founder of the Hirsch Organization and creator of the Stock Trader’s Almanac, discovered it in 1972 when the market showed statistically predictable patterns with an upward movement that runs from Dec. 28 to Jan. 2 of the following year.
The question is, will it continue or will it be stolen by an inflation Grinch? Traders are optimistic, perhaps even giddy, about the market for next year. But we may be challenged, as inflation remains elusive of the 2% target the Fed would like to see.
The Santa Rally seems to be on course once again with Donald Trump’s election victory, the prospect of interest rate cuts and record inflows into the stock market. In fact, the last few weeks saw an injection of a record $186 billion, driving up prices mostly on the “Magnificent Seven” tech giants, which now account for about 33% of the S&P 500’s market capitalization.
There are several reasons for the Santa Rally. Institutional rebalancing of funds for the year’s end is one hypothesis, while other analysts say whale investors tend to be on vacation that last week and retail traders drive up prices. There is also the theory that there exists a seasonal anomaly that causes stock prices to increase in January more than any other month, and investors always anticipate this move early on. Still others say a slowdown in tax-loss harvesting, which has a deadline of Dec. 31, is the cause. Optimism regarding the new year and holiday spending also contribute to the rally.
Whatever the reason, we can assume a bias is to the upside during these last few trading days of the year.
Leading into the human aspect of trading, one client I spoke with had an amazing idea for his holiday gift-giving. He explained how the last thing any of his three adult children needed was “stuff.” They had everything that would put any normal parent in panic mode. What do you give kids who have everything and want for nothing?
He explained his brilliant idea: give each child a trading account, $5,000 seed money and a subscription to our Trading Room. He is even considering having them compete against each other by setting various milestones for them to reach, with accompanying rewards. This was an amazing proposal, as it involves teaching your children how to day trade options on the SPDR S&P 500 ETF (NYSEARCA: SPY).
There is something very comforting in knowing that your children are able to fend for themselves in this chaotic world. As you know, there is no security in a job. In fact, the very word “JOB” is an acronym for “Just Over Broke.” It seems like you will always spend more than you earn, and you will always be on the wrong side of the calendar when your money runs out before the month. There is something very liberating in knowing your children should be okay financially.
You may want to consider the same: give a gift they will appreciate long after the holidays are over. Give the gift of learning to trade SPY options. Imagine never having to worry about your children’s economic future when they know how to shake the stock market money tree!
We have several effective programs you may want to ponder.
Our strategies come to life in our Trading Room, every morning from 9:20 to 10:30 a.m., ET. Traders plan their lives around this event, which is hosted by veteran traders Ahren and myself, Hugh. Together, we have over 40 years combined market experience. Some have been members for many years. They make money. So should your children when you present them with an opportunity unlike anything they’ve ever imagined.
If you are not able to join us in the morning, our DayTradeSPY Signal may be of interest. A particular algorithm based on a “high probability of a 5% profit” option to buy immediately is sent to your cell phone. Click here for details on this exciting product.
Our Pick of the Day service sends an option of interest to your inbox before the opening bell, and it is to be purchased at market open. We aim for a 6% gain. Click here for information.
Just starting out? Check out our ever-popular Inner Circle. Click here for details.
Still unsure? Join us Sunday night at 8 p.m., ET for our free Intro to Trading/Week in Review session… time well spent!
What’s better than knowing how to trade? Knowing that your kids know how to trade!
