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Santa Claus Rally

Santa Claus Rally

December 19, 2023

Solid economic news pushed the stock market ever higher last week, with the Dow Jones Industrial Index hitting all-time new highs. The Federal Reserve Chairman, sounding especially optimistic in his last press conference about lower inflation, forecasted interest rate cuts in 2024. Investors viewed this as the widely anticipated pivot from 18 months of raising interest rates to a future reduction in rates.

The Dow Jones, which tracks a narrow section of the stock market, reached all-time new highs following all the positive news. While the broader based S&P 500 Index is still 2% below its all-time highs and the tech heavy Nasdaq is around 9% below it’s highs. The S&P will likely follow the Dow’s lead and hit all time highs in the very near future, while the Nasdaq may take a few more months.

Surpassing the previous all-time high is an important event in technical analysis and confirms that the last bear market truly bottomed on October 13, 2022. Congratulations, you’ve made it though a medium intensity bear market and all the emotions that go with it. Remembering the emotions and being able to draw on the experience will help you grow to become a more seasoned investor. And as a seasoned investor aiming for higher returns, you’ll know to invest when the market is down even if it feels like it will never rise again. The buying opportunity alerts I include in market insights (many in the past year) are there to help you with the timing and explain the rationale behind the advice. There will be many more buying opportunities in the current bull market but for now let’s enjoy the Santa Claus Rally as a welcome gift.

Photograph by: Clint Patterson on Unsplash

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