More Positive Developments Into Year-End & Beyond

I hope everyone who celebrated enjoyed the holidays! My family did our Christmas Eve dinner at the West Dover Inn and then our traditional Christmas night dinner with friends in Vermont as we have done for many, many years. Although many Jews partake in Chinese food and a movie, that option hasn’t been available in the Mount Snow area since the 1990s, much to our dismay.

Lunch on the mountain with my family never has a dull moment and Christmas day was no different. And yes, there is something wrong with the left eye, but it’s under control.

Mother Nature has generally been kind in Vermont, but it looks like she may be misbehaving come Sunday with rain and Monday with another flash freeze. I hope the forecasters are wrong.

The Santa Claus Rally has begun. Again, it lasts through the second trading day of January and only matters if that seven day period is down. I will have more on this next week. All of the major indices are positioned to hit new highs over the coming few weeks. Obviously, being bullish, I would like to see this occur next week, but we don’t always get what we want.

Adding more fuel to the bullish fire, the Volatility Index (VIX) has now fallen below 14 which has positive ramifications over the intermediate-term. VIX in the lows teens is among the most bullish, low risk setups that we have seen over time.

One of my favorite charts since April is below. The high beta (higher risk) stocks continue to outperform the low beta (low volatility) ones on balance. This remains supportive of risk on assets overall and bullish for stocks.

Finally, the semiconductors are below. The are poised for new highs in January and I believe they will get there. That would be yet another positive development for Q1.

On Monday we bought IWO, more XLC, more IYT, more DWAS and more SPHB. We sold XOP, XSMO, some TSLA, some PLTR, some IWN and some QQQ. On Tuesday we bought IYR, SDS and XLU. We sold RSPU, EMB and some QLD. On Wednesday we bought more QLD.