Historically December sees the stock markets enjoy a bull run. Since 1950 no other month has posted a higher average return than December. As a technical trader I always like to look at history, past performance…Here’ what I’ve learned. We have had recessions in the month of December, most notably 1969 and 2007. The most important fact I learned is that the month when most recessions do occur is January, most recently in 1980 which triggered the Great Recession, one of the worst in US economic history. This year’s January bounce has maintained throughout the year, backed by overall strong economic data. Yet as we enter the year end there are some warning signs which could trigger a reversal very quickly. Possible triggers include political turmoil within the white house as impeachment proceedings pick up pace, China-US trade war which has not been settled, global effects of Hong Kong / China revolts, Brexit realities, Middle East tensions…
Overall, maybe not a bad time to stay on the sidelines. Happy New Year!