The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Quiet rally.
Weekend news was benign and investors lifted stock prices to start the week. There’s no clear catalyst behind today’s buying and the Treasury curve is not helping, yields climbed small today. Nonetheless, S&P futures were bid small overnight and gained in the premarket. The index opened about +30 and tacked on a handful more points in the afternoon. Capital flow was quite light today also, only 80%. Obviously, whatever inspired the active players to act today wasn’t compelling enough to draw the usual capital into motion.
Chart-reading isn’t supposed to work but it sure appears that stocks are trading based on the chart lately. The bull has been running nicely for three years. The dips have been lucratively bought the whole way. Early December brought a nice little dip and we’re currently still in it. The all-time highs are a modest rally away (6920).
Here’s a chart of the S&P. It’s not rocket science. It looks like it’s going up. It has looked that way for a while and it has delivered upside in a pretty low-risk manner. Investors are going to do what has worked and buying below prior highs has worked like a charm.
Look at that thing. It’s no surprise that people are buying these last couple weeks of the year.
Setting aside charts, consensus opinion is that 2026 will be a good year for stocks. The January Effect is anticipated to reflect the past three years of the bull market and retail will likely put significant amounts of capital to work in January. These fundamental reasons also provide a justification, albeit an unexciting one, for getting longer during the closing days of the year.
I’m not sure how much upside we could see through year-end, considering the quiet news environment and the less-engaged investor population. We’ll see. It’s probably worth joining if you think you can catch a January rally too.
See you tomorrow.
-Mike
Visdom Market Commentary
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