Santa Rally, New Record for S&P

S&P Performance from Jan 2020 to 23 Dec 2021

US markets performed strongly last night, with S&P ending at a new record. Perhaps Santa Rally has arrived. What a year it has been for US stocks. Looking at S&P, which arguably has the greatest influence on global markets, it has been on a tear since March lows. It currently sits at 4725.79, which is more than double of the 23 March 2020 low of 2184.88.

The fundamental driver is that Omicron appears to be mild and therefore less harmful to the economy. While this may be true, we need to remember that valuations remain sky-high and we are at the start of the withdrawal of extraordinary stimulus measures by most central banks. It is probably not the best time to enter massive long trades.

Personally, I will not be chasing this rally. This festive period is trickier and requires a higher level of conviction for trades. Thus I would prefer to wait for a

My inclination is to wait for a further extension

US markets are the most influential markets in the world, so any correction there will affect other markets as well. There is also the risk of inflation as well, so please be selective of your trades/investments. Good luck!

Author: novaliser

I have been trading since 2012, and retired from the corporate world in Dec 2021 after accumulating enough profits to feel comfortable living without a stable monthly income.

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