Santa Claus Rally for 2020?

audreyh1

audreyh1

Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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2020 has been a wild and crazy stock market year. Will we see another Santa Claus Rally this year even though we are near all time highs (again)? If so, it should start this week.

It kind of fizzled out at the start of 2020.

A Santa Claus Rally usually refers to the last week of December, and the first 2 trading days of Jan. But I’ve noticed many times when “animal spirits” are running high that pops seem to occur during Thanksgiving week - particularly the day after Thanksgiving when trading volume is low.
 
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Time will tell. Interested to see today if Mr Market likes the GSA move.
 
I would not be surprised if we did.

We have some positive factors at work such as:

-a favorable forecast for holiday retail sales growth

-Vaccines coming to market which promise to bring Covid under control and thereby boost the economy for a "return to normalcy".

-A likely fiscal stimulus, possibly in the near term.

-Favorable yoy earnings comparisons coming.

-A favorable interest rate environment and plenty of folks looking to rejoin the workforce.

Perhaps cutting the other way is:
- uncertainty as to control of the Senate. The market prefers divided government. To the extent the market expects that result, that would be bullish in the short run. If that is in fact what happens it would be bullish for the mid to longer term.

-sentiment is mildly bullish which I view negatively. But it bullishness has declined recently.

These are my opinions only. Actual results may vary, and almost certainly will. In any event it should be interesting.
 
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DrRoy said:
Time will tell. Interested to see today if Mr Market likes the GSA move.
Click to expand...
Time will tell - of course!

This is a spectator thread (where spectators can talk amongst themselves).
 
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Hopefully the black Friday sales will give the economy a kickstart without also being a superspreader event for Covid 19....be safe people !
 
I have doubts since in a thread about a week ago, an elated W2R posted the foretelling "W". :D
 
Was wondering about this concept myself. Not sure what to think. My other internal predictions on the market this year have been more wrong than right.
 
Santa is smart and is taking a vacation for 2020. After all, he's a pretty old guy.
 
I agree with Montecfo, there are a lot of good factors. The big unknown of course is the gov't status. A divided gov't is good for stability as it means locked up and no radical changes. So my crystal ball says continued net upward climb through the rest of 2020. The next big effect will be the GA senate results in Jan 2021. That will definitely have an effect. Santa may be approx 1 month late and arrive with a lot of gov't stimulus; or he could stay content with status quo.
 
Santa Claus or light at the end of the tunnel rally.

Either way, I'll take it! :popcorn:
 
I tend to pay attention to end of year high spirits because I use the Dec 31 portfolio value to calculate my withdrawal, and withdraw the funds on the first trading day then rebalance if needed. So many years the timing works out relatively well.

Supposedly a bunch of pension money comes into the market on the first trading day in Jan, driving prices up, but I always wonder about that. Nevertheless, the first two trading days are often higher.
 
I view the first third of the year benefiting from a tailwind as new money comes into the market with 401ks and IRAs getting funded.
 
I am feeling a bit cheated for past years. If all it takes is a bunch of stimulus to overcome big losses in productivity, then why don't we have some stimulus every year?

I mean they could just toss a trillion in May each year (which would get rid of the sell in May and go away crowd) and then another trillion or two near the end of the year.
 
audreyh1 said:
I tend to pay attention to end of year high spirits because I use the Dec 31 portfolio value to calculate my withdrawal, and withdraw the funds on the first trading day then rebalance if needed. So many years the timing works out relatively well.
Click to expand...

Same, though I wait until January 31 for rebalancing, generally shooting for between 55/45 and 60/40. I also have to make sure I keep the two IRAs that I use for SEPP funded with enough cash to supply 2-3 years of income so I don't have to sell if the market tanks in the short term.
 
Fermion said:
I am feeling a bit cheated for past years. If all it takes is a bunch of stimulus to overcome big losses in productivity, then why don't we have some stimulus every year?

I mean they could just toss a trillion in May each year (which would get rid of the sell in May and go away crowd) and then another trillion or two near the end of the year.
Click to expand...

Yellen is a big fan of QE so that may become a reality.
 
Fermion said:
I am feeling a bit cheated for past years. If all it takes is a bunch of stimulus to overcome big losses in productivity, then why don't we have some stimulus every year?

I mean they could just toss a trillion in May each year (which would get rid of the sell in May and go away crowd) and then another trillion or two near the end of the year.
Click to expand...

Yeah, well, they’ve milked this far longer than I ever imagined. Who knows? We seem to be stuck with asset inflation.

All I know to do is rebalance.
 
I am not counting on a Santa rally. All I hope for is not getting a lump of coal in my stocking the same way it happened in 2018.

If anyone remembers, the market crashed in Dec 2018, driving the Dow Jones down almost 20% from the earlier high. The S&P also lost 20%, while the NASDAQ lost 23.6% off their respective high.

The bottom of the market happened right on Dec 24. Heh heh heh... (or should that be Ho! Ho! Ho!) :)
 
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