Santa Was a No Show

JC Parets
January 4, 2024

Santa didn't show up this year for his annual Santa Claus Rally.

Historically, that usually precedes some underwhelming years for the S&P500.

This is the first leg of the January Trifecta, which also includes "The First 5 Days" and the "January Barometer".

Does the S&P500 put in a positive First 5 days of the year?

As January goes, so goes the rest of the year, is how I learned it.

We'll continue to monitor the rest of the Trifecta as the data comes in.

But first, let's reiterate that the S&P500 did NOT rally during a seasonally strong period known as the Santa Claus Rally.

And while this "indicator" is normally reserved for the S&P500, I wanted to widen it out to other equities to get a broader look:

Notice the strength in China during this period where other stocks had a hard time advancing.

Also, from a sector perspective, Financials were positive for this period, also showing a ton of relative strength lately. Healthcare was positive this period as well.

I have a feeling this is a going to be a big theme in 2024: Financials and Healthcare working while the S&P500 underperforms.

Last year, everyone became an "expert" at equally-weighted indexes. Everyone was an expert at small-cap underperformance.

Did you notice?

That started to unwind hard in Q4 and the Russell2000 took over that leadership role. Meanwhile, the Equally-weighted S&P500 started to outperform the market-cap weighted $SPX.

It's a new year, with new trends. But some of these trends already got going in the 4th quarter last year.

Are you watching?

We discussed this all on this week's LIVE Conference Call - our first of the new year.

In this Strategy Session, we discussed which groups of stocks we want to own, which groups we want to avoid, and how all of this impacts Gold, Energy and Interest Rates.

ASC Premium Members check out the replay here and download all the slides.

Then let me know what you think!

JC

 

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