Triple Witch and a Santa Claus Rally 12/17/21

By Hightower Bellevue on March 4, 2022

Randy’s Weekly Market Moment – December 17, 2021

Triple Witch and a Santa Claus Rally

I recall the day when the ticker tape went across my television screen back in the early 1990s, and as many of you know, I’ve not stopped watching the market open ever since. The tape is always telling us something about the market, and right now many of the newer high-growth companies are getting taken out to the woodshed. I think the hot money has left these names, and newer market participants are realizing how difficult it is to make money in the stock market. It takes time, conviction, and a good ticker tape. Remember, Mr. Market doesn’t care what day it is or who you are, he just likes to keep you on your toes and confuse you on when to buy or sell. Bottom line is you need a strategy, and you must stick to it to make money in the financial markets.

Another interesting time for the market is the third Friday of every month when all the option contracts expire. Market participants refer to this day as Triple Witching, but I call it Triple Witch. Most people have no idea why this day is important for market participants. For me it demonstrates where people are at with taking risks. If Triple Witch ends with a big negative tape, that could foreshadow bad things ahead. If the market closes moderately higher or moderately lower on Triple Witch, that generally is a good sign going forward. If the market rallies during Triple Witch—which doesn’t happen often—the market usually reverses badly on Monday. I know what you are thinking: How does this impact my portfolio, and why didn’t Randy save this market moment story for Halloween? I think today’s market action can tell us a lot about where the market might finish this year, and it will also indicate if a Santa Claus rally may happen, which is very possible given the tape and the early market action from Triple Witch today.

We won’t publish a Market Moment next Friday, Christmas Eve. Hopefully Santa will visit your house this year and deliver all the toys and blessings you hope for. The market overall has had a terrific year, and I think the best strategy going forward is to own the larger-cap technology companies that have established business models and earnings. The high-flying names are bound to fail when their revenues or earnings miss Wall Street’s lofty expectations.

Our office is open once again, and we are seeing clients face-to-face or via Zoom, your choice. We also have new offices, same building, different floor.

Be careful, stay safe, and enjoy this wonderful time of year!

Randy at Hightower Bellevue Advisors

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