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Published on: Dec 28, 2018
Or Did It?
It looks like the Grinch may not have been able to stop Christmas from coming to Wall Street. It looks like the Santa Claus Rally came just the same. – or did it?
The worst Christmas Eve in the history of the stock market was followed by the biggest Boxing Day rally in the history of the stock market. We don’t celebrate Boxing Day here in the United States; all the other English-speaking nations celebrate that holiday, but maybe we’ll celebrate it in the future, given the fact that the Dow Jones rallied over 1,000 points this Boxing Day. So that more than eradicated the 650 point drop which was the biggest Christmas Eve drop in history.
A Bounce Could Come at any Time
If you recall, on my last podcast, I mentioned that following Christmas Eve’s drop, this December was the worst December in stock market history. We has finally beaten out the 1931 December. But I also mentioned that given the extreme oversold condition that existed in the market, it was possible that a bounce could come any minute or any day, and I was not sure whether or not we would finish as the worst December in the history of the stock market because we still had several trading days left for the market to bounce, and that is exactly what happened.
The Grinch May Have a Change of Heart
In fact, we managed to close positive on the week. I think the Dow finished up about 617 points. Now, of course, we still have one more day for the Grinch to have another change of heart. If on Monday, the Dow is down more than 617 points which is easy to do given the volatility that we’re seeing, especially we’re no longer oversold to the extent that we were on Tuesday – then the Grinch may have ended up stealing the Santa Claus Rally anyway.