Monday, December 28, 2015

The Santa Claus Rally

The markets saw a little bit of what is commonly known as the Santa Claus rally last week. As often happens around the holidays, the S&P 500 index surged in the week leading up to Christmas by 2.4 percent, although on very little volume. That was enough to inch the S&P into positive territory for the year, although just barely - it's up by 0.1 percent.

This is typically a good time of the year for the stock market. According to the Stock Trader's Almanac, over the past 40 years, the S&P has risen by an average of 1.4 percent in just the week between Christmas and New Year's.

That sets us up for January, which has historically been a good month for stocks, as well as a barometer for the rest of the year. Since 1950, January has seen an average return in the S&P of about 1 percent.

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