Australian Investment Blog

Are we going to get a Christmas rally and why do they occur?

As you know, this time last year the ASX200 aggressively fell 305 points into a low on the 12th of December. This was followed by a 355 point rally into the 2nd of January- see chart 1. This year with both oil and iron ore plunging it’s hard to imagine a strong rally into Christmas, but seasonally they very often occur. Yesterday when I wrote the afternoon report, I stated that I felt the Christmas rally had started after the ASX200 recovered 81 points (1.6%) from the morning lows. When I left for work at 6:30am, I felt like a genius with the Dow trading up well over 200-points, but now as I type the gains have vanished before my eyes and it’s up only 63-points.