December is usually an excellent month for equities. Its often called a window dressing month securing the year end bonuses for the staff within the financial services industry. This year very few indeed are on the short side here so we must assume there are very few that want lower equities to record lower year end numbers. In general terms the technical indicators are showing weakness in spite of this year end structural optimism, dow and dax aside.
Without delay here the various technical reports. Together they are a very powerful set of reports, in my view.
BARCAP-DEC-SEASONTRENDS-26-11-13
Yardeni-Techindicators-29-11-13
Read all the reports together in my view. If you are running a large book of equity longs then near term option puts out of the money are very cheap hedge, for obvious reasons.
Most will always expire worthless but given the divergence between price and everything else it a wise allocation in my view.
What price do you place on an easy night’s sleep is also a good question to ask.
Good luck and a prosperous final 4 weeks of 2013 to all.
All the best
Rich