The markets are ramping higher today, with the S&P 500 having bounced of its 50-DMA in the overnight futures session.
As you can see, this has been THE line since stocks began rallying in early 2013. Any time we broke through this line, stocks rallied hard soon after.
With that in mind, it seems likely traders will try to affect a Santa Clause rally. If you’re unfamiliar with this term, the “Santa Clause Rally” refers to the fact that the markets tend to rally into the end of the year.
December is hands down the single best month for stocks: historically the Dow has rallied in December at least 70% of the time.
Moreover, the biggest push usually occurs in the last ten trading days of the year (this week and next). This is why they call it the Santa Clause rally (it happens around Christmas).
So barring any huge negative developments, the markets should rally over the next few weeks based on historical and seasonal patterns.
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