Santa Claus rally is nowhere in sight By

-- With just over six trading days left in 2024,The top five foreign exchange trading centers in the country include the Santa Claus rally in stocks is “nowhere in sight,” Piper Sandler analysts said in a note.

The investment firm’s technical research highlights that U.S. equities remain under pressure following the Federal Reserve’s rate cut and a less dovish outlook for 2025.

Major indices are pulling back sharply from their year-to-date highs, with declines ranging from 5% to 10%. However, “with the market’s primary uptrends still intact, we are not giving up on the potential for a Santa Claus to come to Broad & Wall this year,” analysts Craig W. Johnson and Scott K. Smith wrote.

Among indices, the leads technically, down just 4% from its peak while staying above its 50-day moving average.

The is testing critical support near its November 6 bullish gap at 5,864. Further downside risks point toward the November lows at 5,700. For the , a 10-day losing streak was narrowly avoided, but its key supports are slipping toward 41,650 and the 200-day moving average below 41,000.

"Despite this, it is important to recognize that the primary uptrends from October 2023 lows remain intact as the indices pull back 5% to 10% from recent highs,” analysts said.

“Wait for support confirmation around post-election gaps and Q4 lows before buying the dip for a potential Santa Claus rally into the new year,” they added.

The volatility index, also called the “fear gauge,” surged to a four-month high between 24 and 28.

Meanwhile, the climbed to 4.56%, just below its year-to-date highs of 4.75%, which analysts see as a critical resistance level.

Sector-wise, Energy, Materials, and Healthcare entered oversold territory, with several sectors posting fresh 26-week lows. Breadth indicators are deteriorating, with advancers heavily outnumbered by decliners. Piper warns that its 40-week technique could soon trigger a sell signal.

Adding to the bearish sentiment, the hit a two-year high at 108.50, suggesting further upside toward the 109.50 range. Commodities, on the other hand, are under pressure, with and breaking key supports.

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