Editor's Note: Jeffrey A. Hirsch is editor-in-chief of the "Stock Trader's Almanac," which popularized the "sell in May" market strategy.
This month felt more like an October than a typical December due to market volatility.
We suspect much of the first half of December weakness was the result of heavier than usual tax-loss selling pressure and Fed rate jitters. Energy stocks and crude oil had another tough year and were among last week's biggest losers. High-yield bonds, many of which are linked to energy, also had a challenging year and were aggressively sold.
The pace and magnitude of early December declines are greater than the historical norm, but that sets us up for a year-end bounce of greater magnitude.
Here is why ... and it's called my "Free Lunch" strategy.