Tendencies to rise in the last days of the year are known typically as a ‘Santa Claus’ rally. The classic signs of exhaustion are also present. So it’s going to be interesting, given the signing of the tax bill;  there may be a slight propensity to see some S&P selling once stocks can settle in the new trading year. 

The more favorable treatment next year for overall taxation is part of what has contributed to investors nursing their holdings awaiting the new year. That’s not an assumption the selling will be significant as of yet but what it may do is give a preview of ‘psychological’ interest in booking profits that accrued during the best upside year the market’s had in quite awhile. 
 

  
How much is priced-in remains in debate, while we believe the majority of all that’s been accomplished for next year by virtue of tax legislation, likely is behind. Hence, while we believe the high multiples some imagine still in store, are generally excessively optimistic, we don’t believe this collapses, at least not yet. 

Now everyone is invested, few are skittish and ideally they’ll get nervous if we sell off early in the New Year; and that sets the stage for a comeback, assisted of course by the flow of seasonal investment ‘contribution’ funds, that typically get into money managers hands from February to April. 
 

Along the way; we pretty well nailed the peak in the Bitcoin frenzy, right as it tripled the proportional move we had from Dutch Tulip Bubbles long ago. I don’t recall that personally but I do know what mania is and we saw that. It became the ‘roach motel’ of investments; you could get in but good luck getting out. Or as I put it: sell, to whom? 

For normal investors it’s a solid Christmas and for the Bitcoin crowd that sold into the bubble. For those who emerged more recently it’s miserable. In the future, with the first-mover advantage gone (not only in Bitcoin but the stock market too as the big move was off the election; certainly not now), one is working with the nuances of what comes next.