On November 16 in this space we predicted a so-called Santa Claus rally in stocks.  This afternoon Fed Chairman Jay Powell donned a red suit and kicked it off.  The catalyst?  Powell didn’t really say anything new of substance about the future course of interest rate policy.  But that doesn’t matter.  All that matters is how the markets interpreted it.  A “dovish tone” was good enough in a market that, as we had characteristized it, had become deeply steeped in bearsish sentiment.  

As we had also reasoned, however, the anticipated rally would not negate the broader bearish picture.  Based on a mid-quarter Synthetic Systems update, this rally has an expiration date around the end of the year.  That is, expect stock prices to zig-zag their way higher into year end.  The bear market continues, only temporarily eclipsed by a bear market rally.  Come January, stock prices will resume their decline.