With 1 Trading Day Left, Still No Holiday Rally

[stopbush]

With 1 Trading Day Left, Still No Holiday Rally

By Jerry Knight
Washington Post Staff Writer
Thursday, December 29, 2005; 5:33 PM

The Wall Street cheerleaders who had predicted a "Santa Claus rally" were saying today, "Wait 'til next year," as stock prices continued to retreat.

Today's loss left the Dow up for the year by less than a paltry 2 points -- not a big enough percentage gain to bother calculating. The S&P and Nasdaq composite indexes are both up about 3.5 percent for the year.

Forecasts for a year-end rally were based on historical records that show stocks usually gain on the last five trading days of the old year and the first two days of the new one.
But the Dow has dropped more than 100 points over the last four days, so it will take a surge of stock buying tomorrow to generate a post-Christmas gain.

Why should that rule hold when the Christmas-rally idea didn't? The theory is that this week's losses were the result of heavy selling, so there is lots of cash waiting to be redeployed next year. Of course, it also could be that some investors are waiting to sell after New Year's Day so they can put off paying taxes on their profits.

http://www.washingtonpost.com/wp-dyn/content/article/2005/12/29/AR2005122901007.html

[Neil Lisst]

1. The Fox News Freaks are trying to talk it UP.

I watch Fox Business News for the laughs. They get a bunch of honking geese together I wouldn't let valet park my car to quack about how great the economy is. Real estate is GREAT! Interest rates, GREAT! Unemployment, GREAT!

The private and public debt bubble is building. The trade deficit rages.

I think the Dow will be higher this week than at any point in 2006.

[MazeRat7]

2. I'm holding my gains until after the 1st for tax reasons. (n/t)

[librechik]

3. At a certain point, "trust me" doesn't work

in the "free market"