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Stock Trader’s Almanac Editor-in-Chief Jeffrey Hirsch on the outlook for the markets.
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-- -- off to -- choppy start this month as the battle inside about what continues but the fiscal debate.
May not be the best indicator of next year's market.
-- forget that instead we've got somebody who says seasonal trends are worth watching and a few may be signaling a possible pullback.
Joining us now I'm Jeff her she -- -- -- this stuff is the stock trader's almanac editor in chief and if you've never seen the stock trader's almanac.
Showed you right now and you can see people live and die by this thing it's what do you mean a pullback what is it that you're indicating her scene well principle that.
I mean there's several things the post -- -- itself is of the worst year in the cycle even some of the research that's been put out obviously is still shows there's an issue there.
I look back at the secular bear market of the you know 6632 period and there was.
For basic election year year and exits and 6872.
76 and eighty where.
We had some significant bear markets follow your I think we're in similar situation nothing's ever repeats exactly but I think there's from mining going.
Now Milton Friedman said there's no such thing as a free lunch but there is anything on Wall Street tell us about the free lunch and how it might affect investing well it's it's it's script.
Quick strategy for nimble traders are we you know sort of views that the -- attention you know -- of -- Friedman comment but.
This a small cap affected -- effect which we found starts in mid December most that move the small caps.
Happens less to be -- December and what we found over the years is that.
Stocks making new 52 week lows.
Around mid December or we moved it up to triple witching -- there's a lot of volatility there also gives us the weekend the call through some of the stocks him.
Pull out the really bizarre ones and we trimmed down.
You know.
Anything that's not common stock preferred new issues that sort of thing.
And this is averaged about you know eleven point 7% per year is only been five eight down.
Years from that basket and -- beaten -- New York Stock Exchange.
Every single year except for five of the last thirty.
So it's just a quick trading -- you sort of get there.
The wanted them but you don't wanna stick around too long you know when Hannah and he's the area are early December and what is your what are your -- leave showing you about a Santa Claus rally.
The Santa Claus -- is our our TVs and of themselves so.
Everyone gets excited about this rally and I think it's -- a year end rally from November Halloween through January.
It's originated by -- -- every two.
My father mentor a -- who found the book.
It's the last five days of the year trading days the first of the new year this seven day or not -- -- leading up to Christmas Day no -- Esther and this is shown a bullish bias she get.
Weakness in you know bill part of December and and you get this -- once -- -- after -- tax loss selling.
And the profit taking there.
Window dressing remember hearing about today the portfolio pumping is over.
And you get this you know averaged one half percent rally -- her with us here.
I don't think I'm not a signature and are we gonna see and I wanna see if we don't because the line is if we don't see in the San -- failed to call bears may come to broaden wall what we've seen the last times.
We haven't had it 9405.
We -- -- years 2002008.
We had some pretty nasty bear market so.
It's the bullish season is not bullish it's usually an indication for something more.
You know important -- more dramatically at at play now were months after the election there are patterns after elections are we fitting that pattern is here.
-- I mean there was -- election year was was up which is -- -- -- become a winning we've had a weakness in November after -- upcoming -- very typical remains -- seen at December follows that pattern there are things that -- seasonal but I think where what about the year after an election.
As I said before that's the worst of the four year cycle however it's a little better for Democrats they tend to.
Spend more time debating and getting your policy initiatives together whereas Republicans are little more conservative -- their ideology from -- -- quicker post election years.
Up five down one for Republicans since -- -- at.
-- for Democrats -- Democrats yeah Jeffrey Hirsch stock trader's almanac editor in chief and commodity areas almanac as well you got it all covered thank ever thank you good to see you thank you who.
