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Action continues to be flat

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Another flat day for stocks yesterday with a very late push higher moving the indices into positive territory. The Dow gained 28-points while the S&P 500, Nasdaq, small caps, and the I-fund all added less than 0.1% on the day. Bonds actually outperformed yesterday as yields moved sharply lower.
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The official Santa Claus rally is supposed to occur during Christmas Eve (or the last trading day before Christmas) until two days after the New Year. According to Art Cashen, in the last 24 years, only 6 times has that period experienced a loss. Of those six times, 3 times the year that followed was flat. Twice it preceded a bear market, and once it saw a major sell-off - but not quite a bear market.

Stocks are currently slightly lower during this year's Santa Claus period so history suggests that they may need to move a little higher over the next few days or 2018 could be a rocky year - if you believe in those sort of historical tendencies.

The question going into the New Year is how much of the tax reform is priced into the market since stocks have already rallied on the prospect of higher earnings in the coming years, and potentially more spending money in consumers' pockets? If consumers use that money to pay off debt rather than spend it, it wouldn't have as big of an impact on the economy, but we know most Americans are spenders not savers. Of course that excludes you disciplined TSP Talkers who are saving at a much higher pace than the average Joe and Jane.
Here's a little unofficial data from 2017, which has been a very interesting year:

2017 was just the 7th best year for the S&P in the last 20 years, so the gains weren't all that historic, but the lack of volatility and lack of meaningful pullbacks have made it an unusual year.

This year there were eight1% moves (up or down) in the S&P 500. Over the years there were an average of fifty (50) 1% moves in the S&P 500. We also did not see a 3% pullback in 2017.
There were 62 new all-time highs made in 2017. The average number of new highs during a year when a new high is made, is just 29.

It was another very slow, uneventful day yesterday with the charts showing little development, so again I am going to take advantage and continue with my holiday break and cut this short. Volatility could start to pick up as the year concludes, or into next week and then we'll do more analysis.

I'll leave the prior commentaries below (or see prior day's commentary in the archive if looking at the blog) which show the recent years end of year / beginning of new year, statistics.


Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php


Thanks for reading. We'll see you back here tomorrow.

Tom Crowley


Posted daily at www.tsptalk.com/comments.php


The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.

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