No More Santa Claus Rally?

The Dow took a 94 points hit today as mixed sales data confirms a lackluster holiday season sale.

Indeed, sales data seems to have taken center stage this post-Thanksgiving week and has given the stock market a quick one-two in the jaw, causing doubt as to whether or not Santa Claus rally will occur this year and whether this would be that one out of three years that the US market will turn out to be negative on a December.

The stock market rally has been built on the theme of recovering overall economic indicators so far and the ISM index this week confirmed this trend once again. However, it is not unusual for investors to find reasons to take short term profit off the table after such a huge run. Within the framework of a primary and intermediate bull trend, with the Dow riding above a rising 30MA, a little pullback before the primary trend continues is absolutely necessary and normal. Such pullbacks give better entry points for investors, especially with window dressing needs, which will help December become a positive month again. So far, this behavior seems very much intact and why I have pre-positioned my Master's Stock Options Picks subscribers with call options position so far.