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Did you know you have an 85% chance to profit on the JSE this Christmas?

by , 11 December 2015

For most of the year, top traders call the market right 50% to 60% of the time.

But there's one time of year, when traders are right 85% of time.

After doing my yearly December trading analysis, it's evident.

Over the last seven years, the JSE closed December in the green six times.

Today, I'm going to share the secret to this "Christmas Rally" anomaly and show you exactly how you have an 85% chance to profit this month!

Allow me to be Santa this year.

It’s time to ride the Christmas rally sleigh!

This time of year, most traders and investors buy a huge volume of stocks. 

No one really knows why, but I have some speculations. 

Christmas rally speculation #1: Christmas bonuses entices traders and investors to buy stocks

Christmas time is the month is buying month. 

I’m sure you and everyone who celebrates Christmas, goes out and buys gifts, food and decorations. 

But it’s also the time where very nice Christmas bonuses are given.

And with these bonuses, traders and investors feel confident and joyous to pile into stocks before the New Year arrives. 

Buying stocks leads to one thing, an increase in prices. And when prices go up, so do stock markets. 

Next we have…

Christmas rally speculation #2: Sell and buy to avoid paying taxes

Many investors and investment managers sell their stocks to try and lock in tax reductions, before the end of the year. 

Once they sell their investments, they then buy other stocks which they believe will go up in the next year. 

The selling of old stocks and buying of new ones, pumps the stock prices up. 

But I always believe the proof is in the charts…

And so take a look at how the last seven Decembers have reflected in the charts. 

6 out of 7 means you have an 85% chance of WINNING this December!

What you’re looking at is the monthly JSE-ALSH market chart. 

Each bar (candlestick) you see, represents the price movement over the months. 

What I’ve done to make your life easier, is to look at the highlighted boxes. 

Each highlighted box represents the price movement over December. 

2008: 1.4%

2009: 2.9% 

2010: 6.1%

2011: -2.5%

2012: 3%

2013: 2.8%

2014: 1.1%

You can clearly see that six out of seven Decembers (85%) have shown positive gains. 

This means you have a MUCH better chance to make money buying stocks or derivatives this Christmas instead of selling them. 

Always remember, Wisdom yields Wealth.

Timon Rossolimos 
Senior Editor:  Trading Tips 
Head AnalystRed Hot Storm Trader
Author:           94 Top Trading Lessons of All Time 

Did you know you have an 85% chance to profit on the JSE this Christmas?
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