This frightened the markets a little bit…
December 26 (King World News) – Art Cashin, Head of Floor Operations at UBS: On this day (-2) in 1776 (as you may have heard from your own version of Sister Herman Joseph in the 4th grade), George Washington stood in the front of a small boat, crossed the ice-filled Delaware and brought his men and the stars and stripes to the shores of Trenton, New Jersey. In a matter of minutes his small, tattered band would set upon and defeat a larger, better equipped force of Hessian soldiers of fortune. Washington’s success of course was due to the fact that the mercenary, but usually very efficient Hessians were very hung-over from celebrating too much Christmas! Right?
Well, close enough! You would be right about the presence of both Washington and the hangovers. But it had little to do with Christmas. (The Germanic Hessians had actually celebrated the Feast of St. Nicholas or Sinte Klaass about three weeks earlier.)
The hangovers were due to the fact that Washington had sent an agent (spy?) into the Hessian camp. The fellow challenged the senior officers to a card game (modern science proves that all-male card games create more thirst than the Sahara). Thus, the Hessians were fast a crib when G.W. arrived, thus allowing his rag-tag troop to win the Battle of Trenton and take 1000 prisoners in less than 40 minutes.
The rest of your memory gets an F minus. Washington didn’t stand. The boats were much bigger. And he had a different flag.
Wait a minute (you say)! I saw the picture (you say) – “Washington crossing the Delaware” he stood; the ice; the boat; the flag; the sunrise.
Well, they were all made up by the guy who painted the picture – a guy in Germany named Emanuel Leutze – who had never even seen America. So when he painted the picture (in 1851) he used the boats on the frozen Rhine for inspiration. But the picture looked so good that Americans adopted it. (Truth never got in the way of a good legend.)
And the Flag…..well Congress hadn’t adopted one yet. So, Washington’s men actually carried the Flag of Rhode Island (Blue and white with an anchor on it).
The Wall Street bulls managed to do okay in Friday’s session, and they did it without long boats or card games or secret agents. They managed to recoup after the midweek downside reversal that had frightened the markets a little, but they did come back.
Most of the comeback effort was seen in the very early hours of trading and, as we moved through midday, the traders seemed to begin thinking about the long-Christmas holiday. They did not want to make any over-commitment. They held on to a good deal of the gains, however. They also managed to keep the advances and declines reasonably strong but, as I say, there was no sense of doubling down on the post-opening rally or even gaining momentum or cutting back on the reversal that we had seen at midweek.
So, we will not try to embellish the activity. There was not a lot of discussion going on and we think the market was really all about its own internals. They checked out how things felt and managed to close respectably enough. They carried the recovery rally into the Christmas holiday, which is of course, when the Santa Claus rally begins.
As I keep telling you, when the great Yale Hirsch made the discovery, it was of the last five trading sessions of this year and the first two of the coming year. So, if Santa is coming to town, he will be arriving after he has eaten those cookies and unharnesses Rudolph. In the meantime, we had best check and see where our cousins offshore went as they too were thinking about holiday fashions and where things wanted to go.
Overnight, global equity markets are carrying over some holiday traditions, virtually all of Europe is closed for their respective version of Boxing Day. In Asia the trading was so light, you would think they were actually closed too. Hong Kong was in fact closed, based on its British heritage, and the other markets are scarcely trading with a mild bias to the upside and the US futures are leading a little bit higher which is consistent with the mild upward bias of Boxing Day here in the US.
So, you want to keep your eyes on yields which are approaching their lowest level of many months, but I don’t think it will inspire any major moves. We will look for the market to kind of drone on in a semi-holiday fashion. You want to keep an eye on the Geo-political headlines, some of them are stirring-up, but it’s no sign yet that it is leading to a flight to safety.
Although I say bond yields are lower than they have been in a while. So you know the current drill, stay close to the newsticker and keep your seatbelt fastened and stay nimble alert. And also try to stay awake, but most of all try to stay safe in these perilous times.
Arthur
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