As expected, the U.S. markets are up higher with a relief rally that the Fiscal Cliff fiasco is behind us … for now. But looking at the market’s performance in Q4 provides a healthy dose of context.
For the quarter, when we’re talking about October, November and December, it doesn’t matter if you’re talking about the Dow, the NASDAQ or the S&P 500, everything closed down in the red for the fourth quarter of 2012 because the bulk of the gains were all in back in the $142 area on the S&P 500 ETF (NYSE:SPY), as they were in the March-April timeframe.
So, even though we saw moves up and down, the SPY essentially closed exactly where it was in the beginning of the year within the first couple of months. It didn’t make any progress to the north or south or anywhere. The neutrals won so far.
Anybody that said in the first quarter around March 2012 that by the end of the year we were going to go nowhere, they won because we had some volatility but at the end of the day – or, in this case, at the end of the year – it’s the same price everything was back in March.