E Jingle Bells For The Upside

Jingle bells for the upside – likely precede crosscurrents immediately ahead. It might be almost like the last minute retail bonanza (not so much this year) as is followed by both after-Christmas sales that collide with returns or exchanges.

For the markets, that might be like contrasting the ongoing tax-selling of losers with winners hanging on desiring to take gains but trying to defer doing so until they settle in the new trading (and tax) year. That’s an essence of seasonal crosscurrents, barring any intervening events. 

So far they are holding the S&P up for a statistical gain for the year. My point of course being that so many stocks most investors (or even funds) actually own, at this point, are typically down for the year, and way off their midyear highs. 

For now, the best gains this week were in the most down for the year; such as in key big energy stocks. The biggest surrenders or whipsaws were in stocks like Nike (NKE), reporting great results and then reversing with profit-taking. So even this close to year-end, some will not hesitate taking chips off the table. But on a daily basis the ‘winners’ tend to firm toward year-end, while others don’t. 

You can sell stocks for gains in the new year starting probably Tuesday next week; and you can sell stocks for a loss (if for cash) until the last trading day this year (Thursday).

From an overall perspective the year was one of distribution, shifting monetary policy with buybacks masking earnings slippage and insider selling. The geopolitical issues will be paramount also next year, a time in which markets will respond, because the Fed doesn’t have Wall Street’s back nor is the general tone of the political campaign friendly to Wall Street or to the low-capital-gains (relatively speaking) tax environment.   

Daily action – retreated from fading (shorting this market), as the day evolved in a manner clearly related to the ‘Santa Claus’ rally suspected as ‘relief’, after the hammering below the S&P 2000 level during the course of Expiration last week. Just keep in mind that unless Santa’s sleigh runs into a snowbank, there is trouble ahead as we approach the point where 2016 settlements can occur.