Hey,
Welcome to a brand new month, Evolvers!
December is a special one for stocks.
Historically, it's been one of the best-performing periods of the year for the S&P 500 ETF Trust (NYSEARCA: SPY).
Why? Usually, because of tax loss harvesting, trading volume, and trader sentiment heading into the new year (more on that later…)
And following the bullish reaction to Federal Reserve Chairman Jerome Powell's speech at the Brookings Institute yesterday, it's possible that the market is gearing up for yet another 'Santa Claus rally.'
But anyone who's been trading this unpredictable bear market knows that 2022 is very different from most years.
(On average, the SPY gains about 9% per year. In 2022, it's down 15% YTD.)
So, it goes without saying that we can't expect past history to predict price action in 2022.
With the SPY already up 16% off the October lows, it's possible the year-end rally happened slightly earlier this year.
On the other hand, yesterday's massive surge — with the SPY gaining more than 2.8% intraday — suggests otherwise.
Keep reading and we'll try to answer the remaining questions about trading this December…
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