Rebound...

December has been up 75% of the time since 1929 in the S&P 500, with the second highest average monthly return and the smallest average drawdown. And whenever the S&P has lost more than 4% during November, December was higher five out of five times by an average of +5.6%.

Past results is no guarantor of future performance, as the saying goes, but while history rarely repeats, it often rhymes.

The autumn swoon stopped directly on the August lows, precisely ten percent from an all-time high. While this is admittedly a bit

cute for my liking, the technicians in our midst now have a level to lean against.

Keep in mind that the sharpest rallies occur in the context of a bear market and formidable resistance resides above at S&P 1490. The bulls seems to have chewed through that resistance, and the double-bottom ten percent blink-and-you-missed-it correction will be obvious with the benefit of hindsight.

I believe that “Don’t fight the Fed” is one of the most dangerous axioms in finance. Still, the perception that the FOMC is on call and at the ready could buoy markets through year-end, particularly if he they cut Fed Funds by fifty basis points and again adjust the discount rate lower on December 11th.

However, as traders, the path we take is entirely more important than the destination we arrive at. Interesting times indeed, fraught with risk and by extension opportunities. Stay alert and understand that a litany of agendas are littering our financial landscape. You don’t have to agree with them, you simply have to respect them. All the way to the bank.