Monday, December 1, 2025
December Post-Election Year Seasonality of US Stock Markets | Jeff Hirsch
Wednesday, December 4, 2024
December Stock Market Performance in Election Years | Jeff Hirsch
Trading in December is typically holiday-inspired, driven by a buying bias throughout the month. However, the first part of the month tends to be weaker due to tax-loss selling and year-end portfolio restructuring. Over the last 21 years, December’s first trading day has generally been bearish for both the S&P 500 and the Russell 2000. A modest rally through the sixth or seventh trading day often fizzles out as the month progresses. Around mid-month, however, holiday cheer tends to take over, and tax-loss selling pressure fades, pushing the indexes higher with a brief pause near the end of the month. In election years, Decembers follow a similar pattern but with significantly larger historical gains in the second half of the month, particularly for the Russell 2000.
This serves as our first market indicator for the New Year. Years when the SCR fails to materialize are often followed by flat or down markets. Of the last seven instances where our SCR (the last five trading days of the year and the first two trading days of the new year) did not occur, six were followed by flat years (1994, 2004, and 2015), two by severe bear markets (2000 and 2008), and one by a mild bear market that ended in February 2016. The absence of Santa this year was likely due to temporary inflation and interest rate concerns that quickly dissipated. As Yale Hirsch’s now-famous line states, “If Santa Claus should fail to call, bears may come to Broad and Wall.”
Thursday, November 21, 2024
Thanksgiving to Santa Claus Rally Trade │ Jeff Hirsch
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%.
Jeffrey A. Hirsch (November 20, 2024) - Feast On Small Caps Thanksgiving to Santa Claus Rally Trade.
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