Please note - The Service will next be updated on December 30th. Merry Christmas!
The stock market is entering the lowest volume time of year. That offers an opportunity for enterprising traders to move the market in a new direction.
When traders go on holiday they are more apt to introduce stops on leveraged positions. That offers an opportunity for those still in the market to trigger those stops with a relatively small amount of capital.
Over the holiday period between now and New Year, there is scope for some dynamic moves to occur. When everyone gets back to the office in January, they look around and observe big moves in the last week of the year. That drives interest in beaten down sectors.
That also provides a handy answer to the big question for what will do best in 2025.
So, what was happening in today’s shortened hours?
The first and most significant trend is the sharp rebound on Wall Street which this time was accompanied by a commensurate rebound in bitcoin.
The long version of the Santa Claus rally begins following Thanksgiving on the fourth Thursday of November and runs through to the first week of January. The short version is from Christmas Eve until the first trading day of the year.
The primary Wall Street indices found near-term lows on Friday and continue to extend rebounds.
Bitcoin found support at the lower side of its range today to confirm a near-term low.
The market is attempting to shake off the mildly hawkish tone from the Fed meeting last week. The deregulation, and attack on government spending pioneered by the incoming Trump administration, may be more important.
The trend of investment in AI is still full steam ahead too and will also benefit from deregulation. That is fuelling bullish sentiment.
Meanwhile, China announced they will be more proactive in supporting consumer demand in 2025. Reuters reported $411 billion in new special bonds are due to be issued in 2025 to fund this stimulus.
That fuelled a modest rebound in Hong Kong shares today.
By comparison gold is trading in a more muted fashion because the trend of rising yields is a headwind.