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DJIA: 47,952
Who are you going to believe, market history… or your eyes? December is a good month for stocks, really! Yet here at mid-month, advancing stocks have outnumbered declining stocks only three of 12 days. And this is the time of year when the average stock typically outperforms while the winners often lag. Then, too, when it comes to December the term crosscurrents can’t be overused. And we recall plenty of Decembers that had their struggles somewhere along the line. And all things being equal the overall technical background supports strength regardless of the month. Even the Russell 2000, a measure of secondary stocks made a new high.
NYSE stocks above their 200-day have often looked worrisome, stuck as they are in the 50–60% range while the averages made new highs. Fortunately, it has been worrisome, but without consequence. The explanation seems to lie in what has characterized this market for some time, rotation. When markets lose participation, as this one has, we have seen something come along to replace what has been lost. Not long ago the Healthcare stocks including Biotech came to life, and even more recently a number of Retailers. Even more surprisingly, Autos like Ford Motor (F – 13) and General Motors (GM – 81) are acting well and Airlines very well. Gold already has had a good year, but also has a high win rate these last two weeks of December.
Frank D. Gretz
PLEASE NOTE: Unless otherwise stated, the firm and any affiliated person or entity 1) either does not own any, or owns less than 1%, of the outstanding shares of any public company mentioned, 2) does not receive, and has not within the past 12 months received, investment banking compensation or other compensation from any public company mentioned, and 3) does not expect within the next three months to receive investment banking compensation or other compensation from any public company mentioned. The firm does not currently make markets in any public securities.
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