Melting Up

Officially, the period for a Santa Clause rally began today and lasts through the first two trading days of January. And right now we are ahead of schedule, given the rally started three days early.

santa.jpg

Bearish? Or opportunity for out-sized gains?

Part of the reason for the follow through today was attributed to an agreement in Congress to approve a two-month extension of the payroll tax cut and unemployment benefits.

There was also some domestic data released prior to the opening bell. The November durable goods number came in at a 3.8%, which easily beat estimates of a 1.9% advance. Most of advance was attributed to new orders for civilian aircraft. Excluding transportation, durable goods were up a much more modest 0.3% and that was a bit lower than estimates looking for a 0.4% advance.

One other notable economic data point was new home sales, which rose 1.6 percent in November to a 315,000 annual unit rate. That number only modestly beat estimates for 300,000 sales. The bad news is that prices are still soft as median home prices fell 3.8% (nationally).

Here's today's charts:

NAMO-NYMO.jpg

NAMO and NYMO continued their march higher. Both remains on buys.

NAHL-NYHL.jpg

NAHL and NYHL dipped a bit on today's trading, but they still remain on buys.

TRIN-TRINQ.jpg

TRIN and TRINQ both edged lower and remain on buys.

BPCOMPQ.png

BPCOMPQ crossed up through the upper bollinger band today while maintaining its buy status.

So all signals remain on buys, which keeps the Seven Sentinels in an official intermediate term buy condition.

So far, so good if one is invested in stocks. And many of us are. The charts suggest more upside, but sentiment is in bearish territory in some pockets (like ours). But as you've been hearing, seasonality this time of year can trump sentiment.

I took the opportunity to reduce my stock exposure again today and split my risk at 50% G and 50% S. I've already achieved some good gains on this latest advance, so I'm content to lower my risk at this point even though Santa appears to be handing out cash this year.

I posted some preliminary tracker numbers in my account talk thread this morning that revealed we are ramping up our stock exposure rather heavily. Especially the Top 50. I'll post the final charts for next week sometime over the three day weekend.

Merry Christmas everyone. Be safe and enjoy time with the family. :)
 
CH,
Just want to tell you ..... "Thank You" for everything you do for TSPTalk.
Merry Christmas
 
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