Are We Going To Start Santa Claus Rally?

I have been buying the dip for the first 2 weeks of December when the market was selling off due to fear over the Omnicron covid variant and Federal Reserve’s decision to accelerate tapering and increase the interest rate for next year.

While the impact of Omnicron still remains unknown, the statistical evidence has shown that it has not done any significant damage yet to justify the fears raised earlier. There were people who believe that this is the start of the end of the pandemic as the virus gets more contagious but less deadly and finally coexists with its human host.

In yesterday’s Federal Reserve Meeting, the announcements made by Chairman Jerome Powell had given the market a great boost as stocks turned from red to green in the closing hours.

What Is My Next Move?
While I may be optimistic about the stock market’s recovery in my recent purchase, I have also set aside some capital just in case the market crashed after the FMOC meeting. With many of the negative catalysts already happened and digested by the market, I believe the famous Santa Claus will now start and will continue until Jan 22 where earnings are announced. My plan is to use my reserve capital to buy options on my conviction stocks tonight and ride on the rally and sell them next year to take profits when there is another correction next year. Then repeat the cycle of buying the dip when people are fearful with the capital that I free up from my options contracts sale. When stock is on a bullish uptrend, LEAPS will give you an insane return.

I wish everyone all the best in your investing/ trading journey and may 2021 be a memorable year where you make breakthroughs and also reap great reaps because you dare to venture out of your comfort zone.