📈 History says more upside ahead

The S&P 500 has set 90 new all-time highs over the past two years — 57 in 2024 and 33 so far this year.

But data shows that new highs aren’t usually the end of the move, they’re often the middle.

🟡 Since 1953, the index has gained an average of +1.6% in the next 3 months after hitting an ATH.

🟡 Over 6 months, the average return rises to +4.1%.

🟡 One year later, it’s +8.4% on average.

Historically, record highs haven’t marked tops, they’ve signaled momentum. The market tends to reward patience after euphoria.

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🎅 The year-end rally isn’t magic, it’s mechanics

Every October, markets look chaotic, then suddenly flip. It’s not a mystery. It’s the same yearly pattern powered by fund behavior, buybacks, and inflows.

🟡 October cleanup: Around October 20, mutual funds managing $2T rebalance and dump underperformers before fiscal year-end. That short-term volatility sets the stage for a rally.

🟡 Performance chasing: 78% of active managers are behind the S&P 500 this year, forcing them to pile into winners like NVDA and TSLA to catch up.

🟡 Window dressing: Funds “decorate” portfolios before reports, selling losers and buying recent winners, driving demand higher.

🟡 Buyback comeback: Corporate buybacks restart after earnings blackouts (around Oct 24), adding steady buying pressure.

🟡 Passive inflows: 401(k)s and index funds keep injecting billions weekly, creating constant demand regardless of sentiment.

Put it all together, and you get the most reliable rally of the year — the Santa Claus Rally. Since 1950, the S&P 500 has averaged +1.3% in the last five trading days of the year and first two of January.

It’s not hope driving the market up, it’s flows, structure, and incentives.

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📊 The weekly review that actually makes you better

Most traders skip reflection, they just move on to the next setup. But that’s where real improvement hides.

This simple framework splits your review into three parts: winning trades, losing trades, and overall performance.

🟡 For winning trades, ask if you’d take the same setup again without knowing the outcome. If not, it wasn’t skill — it was luck.

🟡 For losing trades, focus on logic and process. Did you follow your plan, or did emotion creep in?

🟡 In overall performance, look for patterns. What strengths repeated? What mistakes keep showing up?

Consistency doesn’t come from more trades. It comes from studying the ones you’ve already taken.

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