A Santa Claus Rally refers to the tendency for the stock market to trend up in the last week of December into the New Year. Several theories exist for its existence, including holiday shopping, enthusiasm fueled by the holiday spirit, and professional investment managers adjusting portfolios before going on vacation.
From the look of today’s price action, Santa came early. For me, it’s all about math and the status of the trend. U.S. stocks continue their uptrend with a volatility expansion.
How much more momentum the uptrend will have may be near exhaustion.
Considering the price trend of the stock index is already trended above the top end of the range, it will take a strong thrust of buying enthusiasm to drive it more than 1-2% higher from here.
So, this may be about it for 2019 gains for this broad index.
Only time will tell…
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