After yesterday’s drubbing, the month to date performance of the major indexes looks like this…
Source: Stockcharts.com
Not very Merry.
Does that mean Santa Clause isn’t coming to Wall Street this year? Far from it.
The "Santa Clause Rally," a phenomenon first described by Yale Hirsch in the “Stock Trader’s Almanac, actually refers to the period AFTER Christmas. But because of the catchy name and the media’s tendency to promulgate false trading theories, many people expect the "Santa Clause Rally" to encompass all of December. However, the “Santa Claus Rally” only refers to the day after Christmas until the first two days of the New Year. During this period, stock prices typically advance sharply as the thin market offers mutual and hedge funds the opportunity to push stocks higher.
So, as negative as Monday’s action was, it probably sets the market up for a true Santa Clause Rally to occur next week…when no one is around or expecting it.
it probably sets the market up for a true Santa Clause Rally to occur next week…when no one is around or expecting it.