Maximum Opportunities Strategy In Forex Market Ahead Of Santa Claus Rally

Photo: Doc. MIFX

Did you know, December turned out to be a 'friendly month' for financial market players, especially the stock market? Year after year, investing in the US stock market in December proved consistent in providing fairly large cash.

Take for example the Dow Jones Industrial Average index which hits the performance of 30 of the largest shares of companies in the US. In the last 15 years (2012-2021), the Dow Jones index has almost always provided positive returns in December (assuming, market participants took positions at the end of November and held them back until the end of trading in December).

In the last 15 years period, the Dow Jones index recorded positive performance in December 12 times, while the remaining 3 recorded corrections.

If averaged from a 12-fold Dow Jones index recorded a positive return in the last 15 years, the yield was 3.2 percent. Similar performances can also be found in the S&P 500 and Nasdaq 100 indexes. Jones' Dow Index Results Results In December.

Jadi, jelas bahwa bulan Desember terbilang ramah bagi pasar saham AS yang merupakan kiblat dari pasar saham dunia. Phenomenal rally pasar saham AS pada bulan Desember sering disebut pelaku pasar sebagai Santa Claus Rally.

What's the Cause?

One of the main reasons is psychological factors. The end of the year is usually associated with increased optimism ahead of the new year. The existence of the seasonal happiness of welcoming the long holiday is also considered to have contributed to the Santa Claus Rally phenomenon.

Furthermore, market participants tend to invest more funds into the stock market in December in line with the bonuses they receive from the companies they work for.

Another reason is that in December, institutional investors tend to be more pessimistic on vacation so they don't make many transactions in the US stock market.

For the record, in the period December in 2017-2021, gold prices always scored an increase.

Time Take Opportunities

Entering December, traders should consider the opportunities that can be generated by the Dow Jones, S&P 500, Nasdaq 100, and gold index instruments.

The reason is, the trend that has occurred in recent years where major US stock indexes and gold recorded rally in December is likely to repeat itself.

For traders in the stock market, it is usually quite tricky to take advantage of the moment of Santa Claus rally because traders are required to choose just a few of the hundreds of existing stocks, which will rise in the moment of Santa Claus Rally.

But don't worry, because in MIFX you can make transactions on the major US stock indices mentioned above, namely the Dow Jones, S&P 500, and Nasdaq 100 indices, without having to buy the shares that form the three indices.

That way, you don't have to bother determining what sector and what company you will buy.

As a reference, you can start taking purchase positions on the three stock indexes at the end of November or early December. For the take profit target, you can use historical data from the performances of the Dow Jones, S&P 500, and Nasdaq 100 in December of previous years, or adjust them to your respective analyses and tastes of risk.

Currently, the Dow Jones, S&P 500, and Nasdaq 100 indices are transacted at a relatively low level when compared to their highest position in 2022, so the potential for rally at the end of the year becomes even greater.

A similar strategy also applies to gold instruments, which have considerable potential to re-record price increases in December this year. Moreover, the price of gold has been corrected deeply since breaking the level of 2,000 US dollars/toyo ounces.

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