Santa Claus rally could still show up A Santa Claus rally could still show up, strategist says
A quarterly event called the “triple witching” is raising the level of volatility in markets Friday, but Santa Claus could still help markets rally into year-end, according to Quincy Krosby, chief global strategist at LPL Financial.
A large amount of options that are expiring on Friday is causing big swings for markets, with the Dow down more than 400 points in afternoon trading. There are $2.6 trillion worth of index options set to expire, according to Goldman Sachs.
Still, investors hopeful for a Santa Claus rally could get one next week.
“With the S&P 500 close to the key technical level of 3,900 – and now oversold by most measures – today’s market could surprise to the upside especially given the surge expected in volume,” Krosby wrote in a Friday note.
“Should today’s market performance disappoint, however, Santa could arrive next week to provide holiday greetings and help underpin an even deeper ‘oversold’ rally, even if it’s not within the technical definition of when he’s supposed to arrive. The market doesn’t care when he arrives, just that he actually shows up!” Krosby added.
— Sarah Min