Stock Market Santa Rally at Last?

By: PhilStockWorld

Courtesy of Doug Short. The markets got off to a great start from the opening bell, despite a surprisingly poor number in the pre-market Empire State Manufacturing Survey. By the mid-afternoon, however, the S&P 500 looked like it was following the familiar pattern of setting a mid-day high and retreating in the afternoon. But slowly the index gathered some steam, and the buying accelerated in the final 30 minutes of trading. The index closed the day with a gain of 1.19%, the best performance in sixteen sessions.

The driver for the strong performance was the steady stream of news reports about progress in the Fiscal Cliff negotiations. But don’t hold your breath: Bloomberg reports that Senate Majority Leader Harry Reid said today it appears the chamber will need to reconvene December 26 to work on the budget. Meanwhile, it looks like we might get a bit of Santa rally.

Here is a five-minute chart of morning liftoff and afternoon acceleration.

The S&P 500 is now up 13.74% for 2012 but 2.42% below the interim closing high of September 14th.

From a longer-term perspective, the index is 111.4% above the March 2009 closing low and 8.6% below the nominal all-time high of October 2007.

For a better sense of how these declines figure into a larger historical context, here’s a long-term view of secular bull and bear markets in the S&P Composite since 1871.

- Phil

www.philstockworld.com

Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

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