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Full:https://www.wsj.com/tech/cybersecurity/a-looming-threat-to-bitcoin-the-risk-of-a-quantum-hack-24637e29?st=PN9EqJ&reflink=desktopwebshare_permalink

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Full:https://www.rollingstone.com/culture/culture-news/hawk-tuah-meme-coin-haliey-welch-crypto-1235213606/

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Full:https://www.ft.com/content/fb2c9511-0663-43bc-ae4d-a3a4da743111?shareType=nongift

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Full:https://www.coindesk.com/policy/2024/12/24/north-korea-blamed-for-may-s-usd305m-hack-on-japanese-crypto-exchange-dmm

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Full:https://mileskellerman.substack.com/p/247-trading-and-the-politics-of-time

• With breadth rebounding over the past two days, the clock has started on a potential Zweig Breadth Thrust. This bullish signal occurs when breadth quickly recovers from oversold conditions.
  
• Created by Marty Zweig, this indicator is calculated using a 10-Day EMA of the number of advancing stocks on the NYSE, divided by the total number of stocks on the NYSE. A buy signal occurs when the indicator moves from below 0.40 to above 0.61 within 10 trading days or less.
  
• While this signal is rare, returns have historically been very bullish. According to data from the Leuthold Group, the S&P 500 has always been higher six months later, with an average gain of +16.2%.

Santa Claus:

My oh my, this week escalated quickly to quote the great philosopher Ron Burgundy (Anchorman). The S&P 500 sold off nearly 3% on Wednesday and we saw 97% of all stocks in the S&P 1500 fall as well. That is what we call a selling cascade and it has left many bulls bruised and battered. Be sure to read what Sonu Varghese, VP Global Macro Strategist, had to say about the Fed cut and market reaction in The Fed Pulls a Grinch.

Yes, worries spiked this week over fears about sticky inflation (which we don’t see) and fewer rate cuts next year (which wasn’t really surprise to us – just two weeks ago Sonu wrote about expecting just 2-3 cuts in 2025). But let’s take a step back and put things in context. The S&P 500 is only 3.6% away from the recent highs and it still up 23% for the year, something that most investors would have gladly taken this time a year ago.

Then what else did the Fed say on Wednesday? They upped their views of economic growth and said things looked pretty good on the economic front. That isn’t the worst news. In fact, third quarter GDP came in at a very strong 3.1% and it has now gained more than 3% four of the past five quarters. Additionally, initial jobless claims fell 22,000 to 220,000 and are at the low end of the range the second half of this year. Lastly, forward-looking profit margins and earnings for the S&P 500 are both at all-time highs, suggesting the backdrop for this bull market remains quite strong and healthy.

Let’s Talk About

One of the little-known facts about the Santa Claus Rally (SCR) is that it isn’t the entire month of December; it’s actually only seven trading days. Discovered in 1972 by Yale Hirsch, creator of the Stock Trader’s Almanac (carried on now by his son Jeff Hirsch), the real SCR is the final five trading days of the year and first two trading days of the following year. In other words, the official SCR is set to begin next week on Tuesday, December 24, 2024.

Historically, it turns out these seven days indeed have been quite jolly, as no seven-day combo is more likely to be higher (up 78.4% of the time), and only two combos have a better average return for the S&P 500 than the 1.29% average return during the official Santa Claus Rally period.

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Here’s a chart we shared last week, showing that the latter half of December is when most of the seasonally strong gains occur.

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These seven days tend to be in the green, so that is expected. Take note, Santa didn’t come last year and clearly stocks did just fine in 2024, but be aware these seven days had been higher the previous seven years before 2023. Here are all the returns since the tech bubble imploded 25 years ago.

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The bottom line that really matters to investors is when Santa doesn’t come, as Mr. Hirsch noted in the quote at the start of this blog.

jog on

duc