The "Santa Rally" Has Begun In SPX. But How Much Is Left? Dec 27 Plan
Today was the first day back after the three day Christmas Holiday and also “Day 2” of the infamous seasonal “Santa Rally” that has been much discussed. Recall that this is a 7 trading day period stretching from December 22nd to January 4th that on average returns 1.4% over the last 30 years. While I trade price and my system/setups *exclusively* - not seasonals - it is nonetheless important context to keep in mind. The first two days of the Santa rally have - right on queue - been green.
As readers recall, I got long late day on Friday due to price triggering my core setup - the failed breakdown on Friday afternoon, in anticipation of the holiday rally. I wrote back on Friday: “I decided to add back a partial position here [4799] to hold over the holiday, risking 25% of my daily profits”. This long from Friday followed through decisively, with 30 points of upside today being produced from this trigger.
We still have another 5 days of holiday trading remaining, however. What’s next? In today’s newsletter, I’ll talk this, go over in detail the setup on Friday that got me long for this holiday trade, then talk the actionable trade plan for tomorrow.