Thanksgiving to Santa Claus Rally Trade │ Jeff Hirsch

Thanksgiving [Thursday, November 28] kicks off a run of solid bullish seasonal patterns. November-January is the year’s best consecutive 3-month span (2025 STA p. 149). Then there’s the January Effect (2025 STA p. 112 & 114) of small caps outperforming large caps in January, which begins in mid-December.

 » Buy the Tuesday before Thanksgiving and hold until the 2nd trading day of the New Year. «

And of course, the "Santa Claus Rally," (2025 STA p. 118) invented and named by Yale Hirsch in 1972 in the Almanac. Often confused with any Q4 rally, it is defined as the short, sweet rally that covers the last 5 trading days of the year and the first two trading days of the New Year. Yale also coined the phrase: "If Santa Claus should fail to call, bears may come to Broad and Wall."

We have combined these seasonal occurrences into a single trade: Buy the Tuesday before Thanksgiving and hold until the 2nd trading day of the New Year. Since 1950, S&P 500 has been up 79.73% of the time from the Tuesday before Thanksgiving to the 2nd trading day of the year with an average gain of 2.58%. Russell 2000 is up 77.78% of the time since 1979, average gain 3.34%.

Reference:
Jeffrey A. Hirsch (November 20, 2024) - Feast On Small Caps Thanksgiving to Santa Claus Rally Trade.

 

 » From November 5 to December 31, the average return of the S&P 500 has been 2.68%; Nasdaq 100 5.53%, 

and Russell 2000 5.7%. In election years S&P 500 3.38%; Nasdaq 100 0.79%, and Russell 2000 7.94%. «

 Goldman Sachs fund flows guru Scott Rubner, November 6, 2024. See also [HERE].

 

 S&P 500 (daily bars) - Hurst Cycles; Steve Miller, November 21, 2024. See also [HERE].

See also:

Jeffrey A. Hirsch (November 5, 2024) - Bullish Novembers in Election Years Have Weak Seasonal Points.

Jeffrey A. Hirsch (November 6, 2024) - Presidential Election Day to Yearend Historically Bullish.

Jack Gillen (2009) - Year-End Rally, January Effect, and Trend for the Year Ahead.

The Grinch Barometer | Wayne Whaley

Define the Grinch Barometer as the S&Ps performa over the 3 trading days before and after Xmas (6 days). Stay tuned for Grinch spottings.

 

 

 

Since 1950, a negative Grinch has been followed by a positive January in 16 of those 19 years (average month = +4.3%) and a positive calendar year in 18 of those 19 cases (average year = +19.4%). To the contraire, eleven of the 12 S&P double digit loss years since 1950 followed positive Grinch’s.

 

Quoted from:
Wayne Whaley (Dec 09, 2023) - The Whaley - Grinch Barometer. 

 

On Dec 08 (Fri) the VIX printed a new yearly low at 12.35.

S&P 500 McClellan Summation Index - the long-term version of the McClellan Oscillator  - 

kept steadily rising for six week and closed at 858 last Friday. No reversal.

 

The High Low Logic Index (last Friday = 1.467) indicates no reversal and that the NASDAQ is nowhere near a major top yet. Every major high since 2000 happened only after the logic index had reached 1.92 or higher prior to the top: 2000 = 1.92; 2007 = 2.01; 2015 = 2.18; 2018 = 2.05; 2019 (2020 crash) = 2.17; 2021 = 2.09. 

 

Dow Jones Industrial Average (daily bars)

However, the DJIA now closed the sixth week / the 27th trading day above the 9-day moving average a.k.a. the market maker re-balance level within all different weekly range templates. Not sure when this happened last time. All the shallow consolidations during the past four weeks occurred around the 3-day moving average only. Spectacular. Meanwhile the S&P 500 and the NASDAQ consolidated last week around the 9 DMA into Thursday before taking out the previous weeks high once again - but by some points only. Nasdaq actually printed lower weekly lows and closed on a lower high. What goes up will come down again to 50%+ levels - sooner or later. Next Monday, December 11, the DJIA will open the seventh week / the 28th trading day above the 9 DMA. Impressive outside fourth quarter range on a new 2023 high. The S&P 500 touched the July 27 yearly high to the pip but did not break to the upside. Lagging behind the other two major indexes by at least a single pip. Quite fantastic. Monday, December 10, will be 45 solar longitude degrees away from the November 27 major low. Tuesday, December 12 looks like a New Moon and 'Sensitive Solar Degree' December high. Saturday-Sunday, December 16-17 is a turn day in the geocentric Bradley Siderograph and should mark a low in US stocks. 

Nasdaq 100

Nasdaq 100 (monthly bars). Yearly, Quarterly, Monthly Highs and Lows and Targets. First month up.

Cup & Handle pattern? No.  

 

 

 

 Nasdaq 100 (weekly bars). Four weeks up. Current inside.

Nasdaq 100 (daily bars)

 

Nasdaq 100 (1 hour bars) - Last week narrow range. This one still inside. Close above balance line. 

 

Wednesday, Thursday, Friday 'Major Red News'.

 

 

US Stock Indexes | Shallow Retracement Into Early-Mid-December Now Likely

Dow Jones Industrial Average (weekly bars)

Dow Jones Industrial Average (daily bars)

Monthly weekly and daily trends are up. 

S&P 500 (weekly bars)

S&P 500 (daily bars)

Eleven days, three levels and nearly 6 * ATR above the re-accumulation low of November 9.

 

Nasdaq 100 (weekly bars) 

Nasdaq 100 (daily bars) 

CNN Fear & Greed Index (daily bars).

 NYSE McClellan Oscillator (daily bars)

 

CBOE Volatility Index (monthly bars). Very close to multi-year lows.

SPX Put/Call Ratio = 1.63 for Nov 24 2023.

 

 Seth Golden (Nov 25, 2023):
The Trifecta of Overbought Conditions:
92% of SPX above 20-DMA, highest in 2+ yrs
McClellan Oscillator > 80+
S&P 500 2 std. above 50-DMA (RSI also 70+)

 

 

 

Four weeks+ of price expansion beyond daily, weekly and quarterly levels. Last week narrow daily and weekly ranges. Multi-month inflation melt-up? Possible. Allen Reminick suggests a creep up into November 27 (Mon) or December 1 (Fri) followed by some rather shallow 23-50% move down into December 8 or mid-month, some X-mas rally, sideways into January 12 and up into March-April 2024. Possible. [ Allen Reminick (Nov 20, 2023) - S&P 500 Projection Into June 2024 ]

 

See also:

Richard Wyckoff's Distribution Schematics. 

Nasdaq 100 Volatility Index │ All-Time-Low

March 17, 2017: Nasdaq 100 traders in best mood ever!