Special Risk Capital Management LLC

The Year in Graphic Form . . . Down ! December 31, 2022

December 30, 2022 –  This was a low volume week that Santa Clause decide to skip (ref. “The Santa Clause Rally” Effect).  The chart below is the NASDAQ Composite Index on a weekly basis.  We remain in a down trend.  So . . .  IF one must buy stocks, I would recommend only in select, strong sectors and hold them for a short period of time on a short leach.  This is NOT a Bull market.  There is no reason to “buy & hold” or to be patient.

I am expecting a small / modest rally after the first of the year, likely running into mid-January, then another leg lower.  Why?  Because earnings from the 4^th quarter 2022 will be reporting and they will very likely show muted results.  Of course, I could be wrong, but if you think about it, it’s a rather logical expectation.  In the meantime, inflation (maybe) slowing but still high, interest rates are increasing, Ukraine remains a “wild card” and the Congress will likely become dysfunctional with personalities trying to grab the camera & microphone for the next 2 years.  (editorial: Wonderful !)

So let’s think short term and be very selective.  Until then and all year long . . . .  Happy New Year !

Price chart by MetaStock; used with permission.