Merry Christmas and Happy Holidays everybody. Now time to get back to work. Right off the bat I woke up this morning to an email from Investopedia.com with their TERM OF THE DAY. Fittingly, the term is “Santa Claus Rally”:
Last Monday we noted that the week going into Christmas tends to be at least twice as good as the average week throughout the year. The market certainly did not disappoint locking in a 3.7% rally in the S&P500. The Dow Jones Industrial Average climbed over 400 points to close at the highest levels since July. But the Santa Claus rally is just getting started.
According to Bespoke Investment Group,
“The S&P 500 has averaged a significant gain of 0.93% in the last week of the year with positive returns 77% of the time (64 out of 83). This compares to an average of +0.15% for all weeks since 1928. Over the last 20 years, the average gain during the last week of the year has been smaller at +0.47%, but this is still three times as strong as the average for all weeks throughout the year.”
The major averages are setting up to continue their rallies off the October lows. We are expecting a low volume week that historically elevates prices higher. We have discussed the consequences of Santa not showing up this time of the year, so this week will be a very important one for the market. Stay tuned….
Tags: $DJIA $DIA $SPX $SPY