Santa Rally Version 2023

Unless you’ve been living under a rock, the market melt-up has been quite a site to behold. This Santa Rally, Version 2023 has been good for everyone’s investments - unless you’re short. So many stocks and indices have been making new highs and many people wonder if Jerome Powell will pull off a soft landing after all. He might pull it off, or he might not. I don’t know.

There are so many moving parts to the market that you would be naive to believe everything you read or hear from talking heads (or publications like this one). The only thing you can count on is what you see. Traders trade what they see, you react and you size your bets accordingly.

What do I see? A whole lot of enthusiasm around the possibility that Jerome Powell and his merry band of Fed nerds will cut interest rates next year. I also see that people wanted a good Santa Rally to end the year strong. I see oil and gas prices coming down and volatility in the markets collapsing.

Sure there’s a ton of bad news in the world, especially what’s happening in Gaza right now, but a lot of people are feeling pretty good and getting complacent.

I don’t know when but I expect that sometime in the future the markets will become volatile again. That’s just how it goes. Periods of low volatility will beget periods of high volatility. It’s just the cycle of greed and fear and everyone’s greedy right now.

So, I’ll take these gains and take a bit of profits where I can. I’ll make sure my trend-following stops are in and continue to rebalance my portfolio at the end of every April and October.

Until then, Merry Christmas ya filthy animals.