The market has kicked off the new year with selling.
And we’ve seen plenty of reasons for bulls to take heed.
Santa Fails to Deliver
The selling over the past two days erased the early gains from the beginning of the rally. This season’s “Santa Rally” returned -0.9%.
And as the old saying goes…
“If Santa Claus should fail to call
Bears may come to Broad and Wall”
Historically, 66% of the years following a failed Santa Rally have ended green. But the average return for the year is a measly 5%.
The S&P 500 failed to make new highs, forming a technical double-top.
Risk-On Mood Vanished
Our watchlist has been decimated.
From well over 20 names last week, we have just four stocks remaining on our watchlist.
This tells us the mood of the market has changed.
Time to Reduce Risk
Based on all we’ve seen, we’ve decided to book some profits.
We’ve sold 50% of our remaining seasonal swing positions, which are all still sitting at a healthy profit.
Trading for Keeps does NOT provide buy or sell recommendations. We share the trades we make and the reasons we make them.
Only you can hit the buy or sell button.