Meta Strategy Derivatives Portfolio – Probability Map Update.

Seasonality

As suspected, the traditional Santa Claus Rally had largely been front-run a few days earlier — nonetheless a juicy performance last Monday was sufficient to keep the positive return pattern over the period intact for now.

That flexible market participants pull forward widely expected returns is no wonder, considering just how much publicity this statistical phenomenon gets every single year!

Seasonality is best compared to a natural ebb and flow of the stock market over the calendar year, which causes a background current.

The way of least resistance is along broadly defined directional flows, but specific circumstances can easily overwhelm this soft drift.

As seasonal tendencies were an excellent guide throughout 2021, I continue to trust that ominous news (Omicron, FED tightening, etc.) are still weaker than the positive drift into mid-January.

After that we may be due for a bit of spring cleaning!

I wish you all the best and an excellent new Trading Year!