At last we have that elusive sell signal but time wise we are reaching the last stage of down cycle. Had this signal come 15 days back, I would have jumped on the short side. But today I would stand aside and let it pass. But at least it gives confirmation to the path that lies ahead.
After hours Indices Futures are down a lot. /ES has gone down below its earlier low of 1390 and at some point was down almost 2 %.
Last trading day of the year is normally bearish. As per Stock Trader's Almanac, Nasdaq down 10 out the last 11. And I do not see what kind of last minute deal they can make when both sides want to jump the cliff.
So it is going to be a very interesting week and New Year. Some juicy tit bits as to how 2013 may shape up:
First Five Days in January Indicator - This one has a very nice track record. The last 40 UP first five days of the year have been followed by full-year gains 34 times for an 85% accuracy ratio. This includes 2012 which had a 1.8% rally in the first 5 days. The average gain for the first 39 of those years was 13.6%. The results are less reliable when the first 5 days in January are negative, showing just a 47.8% accuracy rate and an average gain of 0.2%. It’s important to note that the S&P 500 posted a gain for the first 5 days of the year in just 6 of the last 15 Post-Election Years.
Do you want to make a guess ?
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Thanks for sharing my thoughts. It has been a great journey with you all and I wish everyone of you happiness, health and prosperity. Have a great weekend folks.
