The market has been extremely lethargic during the seasonal bullish time towards the year end. We are supposed to have a Santa Claus rally and I was hoping for a strong drawdown by early Dec, which could more likely trigger a strong rally towards the X'mas time. But all we got for this month was about 5 points moving around for S&P. The market seems directionless for the year end. It is anyone's guess where it will go when the new year starts. One way or the other, I think the market is building up its energy for its next big move. I'm leaning towards a quick correction soon.
Although technically the market is at its neutral level, neither overbought nor oversold, the volatility is quite low with VIX around 10. It is too quiet for me. As the Wall Street cliché goes, low volatility is always followed by high volatility. While I don't know the exact timing when VIX will shoot up high, I bet the time will not be too far away. After all, January is typically a bearish season. When VIX starts to move, it is not unusual it could shoot up 30-50% without any prior warning and move up very quickly within days.
Let's see if this time is different! In any case, Happy New Year!
Punjab National Bank has sold its entire stake in a mutual fund joint venture to partner Principal Financial Group.
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