Traditionally the December Santa Claus Rally took place post-Christmas, but that has been evolving over time and has been creeping up earlier on the calendar, and over the last decade, the rally has been starting somewhere close to mid-December. January has tended to be a positive month with an average gain of 1.15 % over the last 10 years. (With 6 years positive and 4 negatives). The outlier years were 2019 with a gain of 7.87% and 2016 with a loss of -5.07% On a longer-term basis over the last 71 years 43 Januarys have been positive and 28 have been negative for an average gain of 1.1%. For the S&P 500, the best January was 1987 with a gain of 13%, the worst was toward the end of the financial crisis in 2009 with a loss of -8.6%.

Currently, approaching mid-December, the equity markets are overbought on several standards of valuation as well as market sentiment measures, so the positive seasonality may be muted going into the end of the year. Looking at the WD Gann decennial cycle (10 years back) 2010 had a stellar December returning a positive 6.53%, while the following January 2011 returned 2.23% for the S&P 500. December 2000 (20 years back) was a muted positive .04% and the following January 2001 saw a much better 3.46% positive return. December 1990 (30 years back) saw a positive 2.48% return and the following January 1981 saw a positive return of 4.15% for the S&P 500. So, as we look at the important factors and outlook, monetary policy continues to be the defining condition and it continues to be historically very accommodative. We've seen a historic accommodative fiscal policy as well.

The supply and demand for equities seem balanced, but valuation and investor sentiment are stretched, while momentum and Internal technical studies are starting to show signs of exhaustion & deterioration. That being the case, a more conservative trading posture seems in order. Going into the end of the quarter/ year-end we will be again looking at the outliers in performance for a reversion to the mean strategy which worked so well this past mutual fund fiscal year-end in October.
The content of this message and its attachments are intended only for the informational and educational use for the intended recipient and may contain confidential and privileged information. If you are not the intended recipient, any dissemination, distribution, or copying of this message or its attachments is prohibited. If you received this message in error, please notify the sender by replying to this email immediately and delete this message and its attachments from your computer. The information provided by TradeZero America, Inc. is solely for educational and informational purposes. None of the information should be understood, construed or inferred to be an offer or solicitation of an offer, or a recommendation, to buy, sell, or hold any security or financial product, or engage in any particular investment strategy. This message is also not an offer to provide advisory or other services by TradeZero America, Inc. All communications sent to or from TradeZero America, Inc. are subject to archive and review by TradeZero America, Inc. and by regulatory and law enforcement authorities. We explicitly disclaim all liability for any action taken based on any information contained in this writing.