The "official" start of the Santa Claus Rally is this Wednesday. For those who forgot, the Santa Claus rally is the tendency for the S&P 500 to rise in the last five trading days of the year, and the first two of the new year. This has been good for an average 1.5 percent gain since 1950, according to the Stock Trader's Almanac.
This is different from:
1) The tendency for stocks to rise in general this time of year. December is the no. 1 month for the S&P 500. During the month, the index is up 1.7 percent on average since 1950, also according to the Stock Trader's Almanac.
2) The "Free Lunch" that is served before Christmas. Tax-loss selling usually results in several stocks and sectors selling on or near their lows around December 15th; those stocks and sectors will usually outperform the market by February 15th in the following year.
3) The "January Effect," the tendency of small-cap stocks to outperform big-cap stocks in January.