After stumbling out of the gate Monday, the bulls dashed through the bears Wednesday on an exuberant Santa Clause sleigh ride rally. The Santa Clause Rally is a short seasonal cycle that typically begins the week before Christmas and can last into early January, sometimes peaking between Christmas and New Year’s  (see attached: Williams True Seasonal Pattern Source, CNBC).

In candlestick analysis, this action forms a short-term bullish pattern called a Hammer. The Hammer sign is a deep drop that fails to close near the low.  Friday, wisemen from the East came bearing gifts of Bullish tidings saying, “We saw the Hammer sign when it rose and have come to purchase them”. Despite Wednesday and Friday’s gains, the S&P 500 closed down on the week.

As we Hammer out 2022 next week, seasonality remains bullish, both short-term, with the Santa Claus Rally, as well as intermediate term, via the Presidential Cycle. That stated, as we gaze into 2023, the broken bearish wedge pattern, strong capital weighted outflows, and weak internals remain the primary drivers of our analysis.

Wishing you a very Merry Christmas and a 2023 full of glee.

Buff Dormeier

Updated: 12/27/2022

Historical references do not assume that any prior market behavior will be duplicated. Past performance does not indicate future results. This material has been prepared by Kingsview Wealth Management, LLC. It is not, and should not, be regarded as investment advice or as a recommendation regarding any particular security or course of action. Opinions expressed herein are current opinions as of the date appearing in this material only. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate their ability to invest for the long term. Investment advisory services offered through Kingsview Wealth Management, LLC (“KWM”), an SEC Registered Investment Adviser.