COVID-19 UPDATE: Wave 3 STILL rolling over, daily cases -9.404 vs 7D ago (5th consecutive day). History suggests a 100% probability of December gains

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STRATEGY: Since 1945, December up 100% of the time, when S&P 500 up 10-15% YTD
Tuesday is the first trading day of the final month of 2020.  Our data science team, led by tireless Ken, compiled some statistics around the expected return for December.  In particular, I was curious how December returns were impacted by YTD gains (Jan 1st to Nov 30th):

- S&P 500 up 12% YTD
- When S&P 500 up 10%-15% YTD (n=13)
- AND a bear market not underway (yes)
- December up 100% of the time and avg gain 3.3% (~100 points)

Unless a bear market starts next month, December looks like it will be a very strong finish for 2020.  And the table below generally confirms our view that strong markets finish strong.  

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Source: FundstratDespite sloppy trading on 11/30, VIX actually declines and approaching 20...While stocks were sharply lower on Monday (11/29), the VIX actually fell on Monday as shown below.  And at 20.57, the VIX is nearing the 20 level, which we view as critical.  As we mentioned a few weeks ago, a VIX <20 takes us to pre-pandemic levels. The benefit of a lower VIX is many funds VaR models (value at risk) would enable a higher level of leverage.   - sub-20 V...

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