![]() But this year, November’s gangbuster returns may have brought forward an early Christmas for investors. “Historically, volatility tends to contract at the end of December, paving the way for predictable year-end gains. Most investors have spent the last 15 months making up losses, and markets may struggle next year. It is worth remembering, however, that we are still lower nearly two years later. However, the combination of overbought conditions and excess bullish sentiment limited gains from weaker-than-expected economic reports that should keep the Federal Reserve at bay next week. While the market struggled to advance early in the week, on Thursday and Friday, markets climbed to set new closing highs for the year, as shown. My best guess is that if the markets are to reach all-time highs this year, we will likely have a correction to reset some of the more extreme overbought conditions.’ Of course, that correction came the next month.” “While it seems as if ‘nothing will stop the market,’ such was the same sentiment we discussed in July in “Trading An Unstoppable Bull Market.” To wit: ‘We must remember that market advances can only go so far before an eventual correction occurs. Last week, we noted that the current rally was exceptionally extended, and corrective or consolidative action was necessary. ![]() The newsletter will resume on December 23rd. There will be NO NEWSLETTER next weekend (December 16th) as I am traveling. Research Report – Wall Street Analysts Are Optimistic For 2024.Did Bullish Investors Front Run The Santa Claus Rally?.
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