Let's be on the lookout for Santa Rally

Let's be on the lookout for Santa Rally. X-Ball, you might be in trouble if you look forward to this Santa Rally!

Santa Rally is a tradition that makes you expect to see the stock market rise from late December to early January every year, but this time things are tougher than you think. Long-chungs are looking forward to "Pretend to be on the way out, Santa Rally after the trap," while short-chungs are working on a "Santa Rally after the trap" scenario. Either way, you have to be careful not to get caught in the trap in this market.

Market Situation: Outliers and Unusualities

1. Small and medium-sized enterprises (SMEs) closing rates in the United States
As of 2024, the closure rate of small and medium-sized businesses is at its highest level over the past decade. What does this mean? In other words, if consumer sentiment dies, Santa Rally will also be X-hardened.
2. Credit card debt increase
Credit card debt is at an all-time high of 1.17 trillion dollars. Consumers are already living by changing their credit cards. If you look at this, the ratio of wood purchases (that is, a sign of recovery in the housing market) is at rock bottom, and the consumption base is dead.
3. Wood Purchasing Rates Plummet
The housing market is famous as a leading indicator of the economy. Lower demand for timber means that the construction market is also dying. In other words, I can't believe what they say when they say, "The economy will improve."

Prediction of the probability of winning Santa Rally

•Winning probability: 33%
With consumer sentiment in the U.S. dying and small businesses struggling with business closures, Santa is hard to come. In order for the market to turn strong, there must be truly magical good news. For example, the Fed suddenly lowers interest rates, or Trump declares that he will "save the economy" in Santa's clothes.

a short-term strategy

1. Longchungi Strategy:
If you don't want to get caught in the abyss trap, focus your portfolio on defensive stocks, healthcare, and essential consumer goods rather than large stocks. Even if Santa Rally comes, they are likely to be the defense line.
2. Short choong strategy:
You can focus on short positions for the Santa Rally trap. However, it is safe to reduce leverage against sudden event risks (e.g., government policy, Fed remarks).

If you could say one more thing:

"Santa started off with Amazon Prime, but may have canceled the shipment when they saw the consumer card limit was full. Check your portfolio again with a drink at the end of the year."

From learned ai 🎅