In every one of the last 14 years, buying Australia's small resources share price index on Christmas Eve would have been a profitable trade within 14 days. It seems investors like the idea of taking a break without having to worry about what is going to happen to markets over the holiday so they sell ahead of Christmas. With low liquidity over the holiday period, relatively small amounts of buying have an unusually large impact on prices. End of year window dressing would feed into this effect. This year, sector prices are especially weak coming into Christmas. Volatility is pushing higher implying continuing weakness but is already at the upper end of the normal range which implies a rising chance of a near term turn. Stronger markets over the holiday period will not necessarily mean prices continuing to rise during January. They could simply run up early in the year before heading lower again. Other influences will dictate the subsequent trajectory.



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