The bullish holiday seasonality is in effect. In the three trading days on either side of Christmas, the market has risen about two-thirds of the time. If the averages have risen in the calendar year prior to this time span, the odds are even higher. The first half of this seasonality has already boosted the market. The next three days are to come. As regular readers may recall, the period from December 15th through January 9th has closed on the upside about 70% of the time.
We will look at ETFs that have done well in the coming week and those that have done well in the six-day holiday period and into January 9th.
Here is a screen of indices that have performed best in that period. To select some ETFs for short-term trades, the following strategy is employed. The best-performers in the chosen time period with at least 20 years of price data are calculated and are presented below. The indices are ranked by the percentage of time periods in which price rose.
Best Performing Indices from December 24th to January 9th
From this list, the stocks or ETFs are screened for relative strength and by dynamic cycles. The latter term refers to the most active cycles that are generating profits now
The NASDAQ is ranked second. From the 24th through the 9th, price has risen more than 70% of the time for an average gain of about 1.3%. We have a choice of the unleveraged Invesco QQQ Trust (QQQ) or the leveraged (two times) ProShares Ultra QQQ (QLD). The NASDAQ index has risen almost 66% of the time in January for a 2.2% gain and for the second highest expected return in any month in the year, about 1.5%. Price is likely to rise over $16000 to new highs by the end of this seasonally strong period.
Since the beginning of December, these stocks have been recommended and can still be held through to January 9th: Apple, Microsoft, KLA Instruments, Applied Materials, and Thermo Electron. In fact, Thermo Electron has risen more than 72% of the time on the 27th and more than 74% of the time on the 29th.