Broker Check


December 23, 2022

Key Takeaway

The famous Santa Claus rally officially begins today and runs through the first couple of trading days of the new year. Will Santa deliver a great gift or a lump of coal this year??  I guess we'll find out soon enough. Frankly I wouldn't be surprised either way. This year has been chocked full of surprises and volatility (both up and down), and I personally believe that next year may be filled with more of the same (opportunity and danger). We will continue to follow our signals to help us identify meaningful up-trends to participate in and work hard to side-step the big down-drafts. So many questions will be revealed next year.... When will inflation subside? Will the Fed orchestrate a soft-landing? Will layoffs pick up? Will the economy slip into a recession, and if so, will it be a deep or shallow recession?

Below is a 2 year chart of the S&P 500 clearly illustrating the difficult year we've experienced along with the obvious downtrending market.

The below chart is a closer look (1 year chart) of the S&P 500. Upon not being able to breakthrough the very tough downtrend resistance, we raised a great deal of cash within our portfolio sleeves. Now the S&P 500 sits below all of its important moving averages (20, 50, 100, 200 day moving averages). RSI is below 50 and MACD is confirming this downtrend. When things begin to turn around, we'll look to jump onto the next up-wave, and will play it very cautious until we see what Santa brings. I hope you all have a wonderful and blessed Christmas with family and friends.

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