Stock Market Update Wednesday December 20, 2023 Investors Call it Whipsaw Wednesday For A Reason. This morning opened with bullish sentiment after consumer confidence exceeded expectations at 10am. This welcome news stemmed from the decline in both interest rates and gas prices, injecting optimism into both the “present situation” and “expectations” components of the index. The housing market also offered a ray of hope, with existing home sales experiencing a slight rebound from their 13-year lows, likely spurred by the decrease in mortgage rates. However, this positive economic data couldn’t sustain the momentum. Despite a two-week rally triggered by Jerome Powell’s initial mention of potential rate cuts, stock investors hit the sell button today and reversed course in the late afternoon, triggering a sustained selling spree across major indexes.
The Energy Information Administration’s weekly report showed that U.S. oil production reached a new all-time high at 13.3 million barrels per day. The Saudi’s need to flush oil down to $45-$50 a barrel for the U.S. to stop producing so much oil. Oil has been rising because of geopolitical events in the Red Sea.
Yale Hirsch, the founder of the Stock Trader’s Almanac, coined the “Santa Claus Rally” in 1972. He defined the timeframe of the final five trading days of the year and the first two trading days of the following year as the dates of the rally. The reason why is because volume will start to become very light and light volume favors the upside. Never short a dull market.
“If Santa Claus should fail to call, bears may come to Broad and Wall.” – Yale Hirsch
