By Markus Heitkoetter
What a week!
At the beginning of last week things looked ugly. The S&P was down 5% off of an all-time high going into Wednesday’s Fed day and then things got exciting. Stocks made a pretty impressive turnaround fueled by the Fed, leading to the biggest weekly gain in 2 months. This excitement in the stock market came while Crude Oil traded at a 5 year low, and the Russian ruble was at an all-time low.
The S&P ended Friday 9.5 points higher. But the S&P managed a 68 point gain for the week, closing the week at 2070.65. The DOW closed Friday with a 27 point gain. The DOW ended the week with a 524 point gain, wrapping up the week at 17804.80
Put a Santa hat on Fed chair Janet Yellen! The Fed downplaying the situation in Russia and showing patience in raising interest rates was the real catalyst behind last week’s rally. But then again Santa works in mysterious ways.
Speaking of Santa…most traders define the “Santa Claus Rally” as a rally that takes place between Christmas and the New Year. But in recent years this hasn’t necessarily been the case. It looks like Santa tends to help the markets most in the week before Christmas, and then his holiday cheer carries over into the first 2 weeks in January.
Taking a quick glance at the S&P numbers below we see that over the last 4 years the last week in December hasn’t been that nice. In fact the S&P has averaged a -3.42 point loss in the last week of December over the last 4 years. However, if we take the last 2 weeks of December and the first 2 weeks of January the S&P has had an average 60.1 point gain during this period.

Keep in mind that this upcoming week is typically a light volume, low volatility, slow week of trading. Markets will close early on Wednesday, December 24th and they will be closed on Christmas Day, December 25th. Markets will be open on December 26th but you’ll find that most traders extend the holiday and aren’t very active on this day (we won’t be trading).
First Solar Inc. (FSLR) has produced some beautiful trends this year using the PowerX Method. The indicators have been bearish since 11th Nov 2014 but with last week’s rally we could see a Buy Signal identified soon. With 2 of the 3 PowerX indicators bullish we need to wait for all 3 to confirm a true uptrend.
A Trader's Journal 