Commentary: Paul Ebeling on Wall Street, Santa Claus Came to Town!

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There were no lumps of coal in savvy investors’ stockings this Christmas“–Paul Ebeling

The US stock market rally came on strong last week, with 3 solid gainers closing on session highs.

Yes, it was a bit early for this Santa Claus rally, but investors did not mind opening up gifts early.

The DJIA rose 1.65% last wk, the S&P 500 index climbed 2.3%, the NAS Comp and small-cap Russell 2000 both rallied for 3.2% weekly gainers.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rebounded 4.75% last week. The Innovator IBD Breakout Opportunities ETF (BOUT) climbed 3.5%, nearly at a record high. The iShares Expanded Tech-Software Sector ETF (IGV) advanced 2.4%. The VanEck Vectors Semiconductor ETF (SMH) rallied 4.4%, with AMD stock a major component.

SPDR S&P Metals & Mining ETF (XME) rose 3.1% last week. The Global X U.S. Infrastructure Development ETF (PAVE) was up 1.7%. US Global Jets ETF (JETS) ascended 6.7%. The SPDR S&P Homebuilders ETF (XHB) climbed 2.7%. The Energy Select SPDR ETF (XLE) edged up 0.9% and the Financial Select SPDR ETF (XLF) 0.6%, after both erased steep losses earlier in the week. The Health Care Select Sector SPDR Fund (XLV) climbed 1%, right at new highs.

On the more-speculative story stocks, ARK Innovation ETF (ARKK) rose 1.9% last week and ARK Genomics ETF (ARKG) inched up 0.6%.

This US stock market rally is has strong momentum.

So, work on your watchlists. Look for stocks with strong relative strength that are holding or reclaiming Key support. Make sure to include stocks from a variety of groups and sectors. Then focus on stocks that are actionable or nearly so.

The Santa Claus Rally covers the last 5 trading days of the yr, plus the 1st 2 trading sessions of the New Year.

And it exploded on the 1st day, Monday with the Bulls in Charge, as the S&P 500 extended it rally to record highs

DJIA +351.82 at 36302.38, NAS Comp +217.89 at 15871.25, S&P 500+65.40 at 4791.19

The S&P 500 rose 1.4% on Monday, setting intraday and closing record highs in a steady advance. The NAS Comp (+1.4%) kept pace, followed by the DJIA (+1.0%) and Russell 2000 (+0.9%) with solid gainers too.

The market was not drawn to any specific bit of news, nor was there any economic data to influence investing decisions. Instead, the market benefited from a continuing willingness among investors to buy equities when momentum is in their favor, particularly at a seasonally-favorable time of the year. 

All 11 S&P 500 sectors closed higher, led by the information technology (+2.2%), energy (+2.2%), and real estate (+2.0%) sectors with gains of at least 2.0%. The utilities sector underperformed on a relative basis with a 0.5% gainer.

  • S&P 500 +27.6% YTD
  • NAS Comp +23.1% YTD
  • DJIA +18.6% YTD
  • Russell 2000 +14.5% YTD

Have a prosperous Christmas Week, Keep the Faith!