No Ho Ho Ho for Wall Street?

No Ho Ho Ho for Wall Street

“If Santa Claus should fail to call; bears may come to Broad & Wall.”

The Stock Market Almanac discovered that it is generally bad news on average if the stock market doesn’t have a good December.  They termed it the Santa Claus Rally.  Thus far, Santa Clause has boycotted Wall Street with the market packing on some big losses.

There are a few troubling signs for 2016 that you might want to keep on your radar.

1. Insider Selling

What do corporate insiders know that we don’t?  For the purpose of this piece, I would define corporate insiders as employees that have a first-hand understanding of the financial conditions of their company and have a real good feel as to where the company is heading.  They also own the company stock.

In November, corporate insiders sold the 4th highest monthly amount of corporate stock in history.  Once again, why are corporate insiders (who know what is happening) selling stock at historic levels.

2. The Collapse in the Price of Oil

It is concerning that the price of oil cannot regain its’ footing.  Who would have thought the price of oil would be trading at $35 a barrel.  The concern is that the price of oil has collapse quickly and stayed at these low levels for a long-time.  The energy industry can sustain price drops for only so long.  The damage to the economy should be starting to show.  It is definitely showing up in the junk bond market as energy companies have defaulted on their bonds.

 

3. The Bond Market

This one is too in-depth to write about in this space.  That is why I have written a special report which you can get just by emailing me at bob@prudentmoney.com.  The next Financial Crisis I believe lies within the bond market and we might be seeing the first signs.

 

4. The Length of Bull Markets

The average bull market lasts roughly 44 months.  This one has been roughly 74 months.  Of course, it is not the longest one on record.  However, I just can’t come up with enough reasons that the market should go higher from here.

What is the answer?  For simply understand how you are invested and make sure it is congruent with your risk level.  That comes down to bonds as well as stocks.

If you want an opinion on your investments, feel free to email at bob@prudentmoney.com.

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