Happy New Year!
I realize this post is a bit late in coming. But, it was hard to assess whether or not it was indeed a happy new year until we finished the trading week. And, it does seem that Santa Claus has delivered once again. I wrote last year about the phenomenon that is the Santa Claus Rally between December 26 and January 2 of each end of year. It seems that it has manifested itself in full force this year with the Dow surged 7% over to close over 9,000 again in the face of continued weakening indicators – consumer confidence and the ISM indexes came in below expectation.
So, the question are these gains for real? Many traders were on holiday over the last week and most of the movements happened on low volume and we’ve got a calendar chock full of economic reports next week. The response to these upcoming reports as well as a return to normal volume will be the real test of the stock market recovery.
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