Historically, owning stocks in December has been a smart bet because of year-end bonuses, retirement contributions, and portfolio rebalancing. This is particularly true between Christmas Day and New Year's Eve, a period so strong investors now grown to expect a "Santa Claus rally" every year. So far, the market is rallying in line with seasonal strength, but warning signals are flashing, suggesting investors ought to prepare for a pullback even if it's uncertain.
The general strategy is to purchase equities one or two days prior to a holiday. Short-term traders would look to sell just after the holiday while longer-term investors would wait until year end. Both strategies have proven to be profitable plays. The theory behind this effect is that traders are lightening up their holdings (selling) prior to the three-day holiday in order to avoid any unexpected bad news. The selling pressure drives stock prices down, making those days a good opportunity for buying lower in the range.
Please comment and subscribe @InvestorsTradingAcademy
- Trading the Santa Claus Rally 2020 ( Download)
- Stock Market Santa Claus Rally - is it Real ( Download)
- The Santa Claus Rally Is Real ( Download)
- Santa Claus Rally, home prices: What to watch this week in markets ( Download)
- Stocks Outlook for 2022 and why there could be a Santa Claus rally ( Download)
- Setting Up for Santa Claus Rally | 3 Minutes on Markets & Money [11/10/20] ( Download)
- What Is the Stock Market's 'Santa Claus effect' ( Download)
- Santa Claus Rally 2019: What You Need to Know ( Download)
- Will There Be A Santa Claus Rally This Year ( Download)
- The Santa Clause Rally is in Full Swing ( Download)
- The chances of a 'Santa Claus Rally' this year on Wall Street ( Download)
- SANTA CLAUS RALLY Will Stocks Rise in 2022 ( Download)
- Will there be a Santa Claus rally Market Recap: Thursday, December 24 ( Download)
- Will There Be a Santa Claus Rally This Year 2020 🎅 ( Download)
- The Santa Claus Rally and January Effect: What to Expect This Year ( Download)