As anticipated, the market experienced a considerable oversold bounce after the bullish reversal on December 20th. That particular day, which saw prices dip into our second Bollinger band (2.5 standard deviations) at their worst, was subsequently followed by three days of bullish price action. However, last Friday, the stock market opened with a very red candle, but the good news was that it improved considerably throughout the day to close about halfway from its lowest point. No matter the trend, there is usually one challenging day around December 28-29, which corresponds to the last day for taking profits and losses for the year. For those who may not be aware, although stock trades execute instantly, the settlement is not immediate. This year, on May 28th, the US and Canada transitioned from a T+2 (48-hour) settlement to a T+1 (24-hour) settlement, meaning the last day for trading stocks in 2024, from a legal taxable standpoint, is December 30th. I was convinced we would see that red candle on this day, but it seems that people either kept their old habits or were not aware of the change, and most decided to move their stocks two days in advance.
Strength Test: Arm Wrestling with Market Bears
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