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Saturday, December 03, 2016 11:13:48 AM
Santa Claus Rally Is Coming, But We Ain’t Seen Nothing Yet
By Almanac Trader
* December 3, 2016
Here we go again. Every year I am compelled to set the record straight. When the jack-o’-lanterns burn out and the turkeys get stuffed everyone starts calling for the Santa Claus Rally. The fourth quarter or yearend rally is not the Santa Claus Rally. Many get caught up in the hype and forget what the real Santa Claus Rally is.
As defined by Yale Hirsch in 1972 in the Stock Trader’s Almanac (50th Anniversary 2017 edition page 114), the Santa Claus Rally is the last 5 trading days of the year and the first 2 of the New Year. (See Wikipedia, Investopedia and elsewhere, just Google it.) The significance of the Santa Claus Rally is really when it does not occur.
Over this 7-day period the S&P 500 averages a rather consistent, yet a modest 1.4% average gain since 1950. But, as the songwriter in Yale declared, “If Santa Claus should fail to call; Bears may come to Broad & Wall.” In the last 22 years the SCR has been down only five times. As you can see in the table below, flat years occurred in 1994, 2005 and 2015, while nasty bears emerged in 2000 and 2008.
The S&P 500 was down -5.1% in 2016. S&P is currently up about 7% year to date. We are currently experience some typical early December softness, but expect tax-loss selling to abate toward the middle or latter part of December and the Santa Claus Rally to emerge. While 2016 looks to be averted the full year weakness typically associated with an absent SCR, a mild NDR-Defined bear market did occur in February of this year.
And as long as President-Elect Trump, and soon to be President Trump, doesn’t slip up Santa should arrive on schedule and we expect the market to tack on further gains well into Q1 2017. Should he stumble, the market may tumble as this rally has been built on stronger economic readings and the promise of big positive, construction changes and policy initiatives from the Trump Administration.
http://jeffhirsch.tumblr.com/post/153964312863/santa-claus-rally-is-coming-but-we-aint-seen
• DiscoverGold
Click on "In reply to", for Authors past commentaries
By Almanac Trader
* December 3, 2016
Here we go again. Every year I am compelled to set the record straight. When the jack-o’-lanterns burn out and the turkeys get stuffed everyone starts calling for the Santa Claus Rally. The fourth quarter or yearend rally is not the Santa Claus Rally. Many get caught up in the hype and forget what the real Santa Claus Rally is.
As defined by Yale Hirsch in 1972 in the Stock Trader’s Almanac (50th Anniversary 2017 edition page 114), the Santa Claus Rally is the last 5 trading days of the year and the first 2 of the New Year. (See Wikipedia, Investopedia and elsewhere, just Google it.) The significance of the Santa Claus Rally is really when it does not occur.
Over this 7-day period the S&P 500 averages a rather consistent, yet a modest 1.4% average gain since 1950. But, as the songwriter in Yale declared, “If Santa Claus should fail to call; Bears may come to Broad & Wall.” In the last 22 years the SCR has been down only five times. As you can see in the table below, flat years occurred in 1994, 2005 and 2015, while nasty bears emerged in 2000 and 2008.
The S&P 500 was down -5.1% in 2016. S&P is currently up about 7% year to date. We are currently experience some typical early December softness, but expect tax-loss selling to abate toward the middle or latter part of December and the Santa Claus Rally to emerge. While 2016 looks to be averted the full year weakness typically associated with an absent SCR, a mild NDR-Defined bear market did occur in February of this year.
And as long as President-Elect Trump, and soon to be President Trump, doesn’t slip up Santa should arrive on schedule and we expect the market to tack on further gains well into Q1 2017. Should he stumble, the market may tumble as this rally has been built on stronger economic readings and the promise of big positive, construction changes and policy initiatives from the Trump Administration.
http://jeffhirsch.tumblr.com/post/153964312863/santa-claus-rally-is-coming-but-we-aint-seen
• DiscoverGold
Click on "In reply to", for Authors past commentaries
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Your Due Dilegence is a must!
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