Tomorrow is Christmas Eve and historically has been the start of annual Santa Claus rallies. The rallies typically run from the day before Christmas and continue through the first two trading days of the New Year. Here's a look at what happens when Santa decides if we have been naughty or nice.
On average, the Dow , S&P 500 , and Nasdaq , have gained 1.9%, 1.7%, and 2.3% respectively during the rally and have been up ~75% or more of the time.
According to the Stock Trader's Almanac, "if Santa Claus should fail to call, bears may come to Broad and Wall." While the odds of a rally are nearly 3:1, a drop often precedes a bear market, the Almanac explains.
Let's hope everyone's been nice this year. Happy Holidays!
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