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Santa Claus Rally: How Will Christmas Impact Stock MarketsSanta Claus Rally: How Will Christmas Impact Stock Markets in 2024 The Santa Claus rally is a well-known seasonal phenomenon where stock markets often see gains during the final trading days of December and the start of January. But what causes this year-end trend, and how does Christmas influence stock markets overall? In this article, we’ll explore the factors behind the rally, its historical significance, and what traders can learn from this unique period in the financial calendar. What Is the Santa Claus Rally? The Santa Claus rally, or simply the Santa rally, refers to a seasonal trend where stock markets often rise during the last five trading days of December and the first two trading days of January. For instance, Santa Claus rally dates for 2024 start on the 24th December and end on the 2nd January, with stock markets closed on the 25th (Christmas day) and the 28th and 29th (a weekend). First identified by Yale Hirsch in 1972 in the Stock Trader’s Almanac, this phenomenon has intrigued traders for decades. While not a guaranteed outcome, it has shown a consistent pattern in market data over the years, making it a point of interest for those analysing year-end trends. In Santa rally history, average returns are modest but noteworthy. For example, per 2019’s Stock Trader’s Almanac, the S&P 500 has historically gained around 1.3% during this period, outperforming most other weeks of the year. Across the seven days, prices have historically climbed 76% of the time. This trend isn’t limited to the US; global indices often experience similar movements, further highlighting its significance. To check market dynamics, head over to FXOpen’s free TickTrader trading platform. The Christmas rally in the stock market is believed to stem from several factors. Low trading volumes during the holiday season, as many institutional investors take time off, may reduce resistance to upward price movements. Retail investors, buoyed by end-of-year optimism or holiday bonuses, may drive additional buying. Additionally, some investors reposition portfolios for tax purposes or adjust holdings ahead of the new year, contributing to the upward momentum. However, this pattern is not immune to disruption. Broader economic events, geopolitical tensions, or bearish sentiment can easily override it. While the Santa Claus rally is a fascinating seasonal trend, it’s essential to view it as one piece of the larger market puzzle rather than a reliable signal on its own. Why Might the Santa Claus Rally Happen? The Santa Claus rally isn’t a random occurrence. Several factors, both psychological and practical, can drive this year-end market trend. While it doesn’t happen every year, when it does, there are usually clear reasons behind it. Investor Optimism and Holiday Sentiment The holiday season often brings a wave of positive sentiment. This optimism can influence traders to take a bullish stance, especially as many are eager to start the new year on a strong note. Retail investors, in particular, may view this period as an opportunity to position themselves for potential January gains. The festive atmosphere and the prospect of year-end “window dressing”—where fund managers buy well-performing stocks to improve portfolio appearances—can also contribute. Tax-Driven Portfolio Adjustments As the year closes, many investors engage in tax-loss harvesting, selling underperforming assets to offset taxable gains. Once these adjustments are complete, reinvestments into higher-performing or promising stocks may push markets higher. This activity can create short-term demand, fuelling upward momentum during the rally period. Lower Trading Volumes Institutional investors often step back during the holidays, leaving markets dominated by retail traders and smaller participants. Lower trading volumes can result in less resistance to price movements, making it easier for upward trends to emerge. With fewer large players balancing the market, price shifts may become more pronounced. Bonus Reinvestments and End-of-Year Contributions Many professionals receive year-end bonuses or make final contributions to retirement accounts during this period. Some of this money flows into the markets, adding buying pressure. This effect is particularly noticeable in December, as investors seek to capitalise on potential market opportunities before the year wraps up. How Christmas Impacts Stock Markets The Christmas period is unique in the trading calendar, shaping market behaviour in ways that stand out from other times of the year. While some effects align with holiday-driven sentiment, others reflect broader seasonal trends. Reduced Liquidity and Trading Volumes One of the most notable impacts of Christmas is the sharp decline in trading activity. This contributes to the Santa rally, with the largest market participants—institutional investors and professional traders—stepping away for the holidays. This thinner activity can lead to sharper price movements as smaller trades carry more influence. For example, stocks with lower market capitalisation may experience greater volatility during this time. Sector-Specific Strength The most popular Christmas stocks tend to be those in the consumer discretionary and retail sectors (though this isn’t guaranteed). The holiday shopping boom drives significant revenues for companies in these sectors, often lifting their stock prices. A strong showing in retail sales, especially in countries like the US, can bolster market indices tied to consumer spending. Many consider companies like Amazon and brick-and-mortar retailers to be among the most popular stocks to buy before Christmas, given they often see increased trading interest around the holidays and a potential Christmas rally. Economic Data Releases The Christmas season still sees the publication of economic indicators. While there are no specific year-end releases from government statistical bodies, some 3rd-party reports may have an impact. Likewise, scheduled publications, such as US jobless claims (every Thursday) or non-farm payrolls (the first Friday of each month), can affect sentiment. Positive data can provide an additional boost to stock markets in December. However, weaker-than-expected results can dampen enthusiasm, counteracting any seasonal cheer. International Variations While Western markets slow down for Christmas, other global markets may not follow the same pattern. For instance, Asian markets, where Christmas is less of a holiday, may see regular or even increased activity. This discrepancy can create interesting dynamics for traders who keep an eye on global portfolios. The "Post-Holiday Rebound" As Christmas wraps up, markets often experience a slight rebound leading into the New Year, driven by renewed investor activity. This period, while brief, is closely watched as it can set the tone for the opening days of January trading. Potential Risks and Considerations While the Santa Claus rally and year-end trends can be intriguing, they are far from guaranteed. Relying solely on these patterns without deeper analysis can lead to overlooked risks and missed opportunities. Uncertain Market Conditions Macro factors, like interest rate changes, geopolitical tensions, or unexpected economic data, can disrupt seasonal trends. For instance, during times of economic uncertainty, the optimism often associated with the holidays might not translate to market gains. Traders must account for these broader dynamics rather than assuming the rally will occur. Overemphasis on Historical Patterns Historical data can provide valuable insights, but markets evolve. A pattern that held up in past decades may not carry the same weight today due to shifts in investor behaviour, technological advancements, and globalisation. Traders focusing too heavily on past trends may miss the impact of more relevant, current developments. Low Liquidity Risks The reduced trading volumes typical of the holiday season can work both ways. While thin markets may allow for upward price movements, they can also lead to heightened volatility. A single large trade or unexpected event can swing prices sharply, posing challenges for those navigating the market during this time. Sector-Specific Sensitivity Sectors like retail and consumer discretionary often draw attention during December due to strong sales data. However, poor performance or weak holiday shopping figures can cause a ripple effect, dragging down not only individual stocks but broader indices tied to these sectors. FOMO and Overtrading The hype surrounding the Santa Claus rally can lead to overtrading or ill-timed decisions, particularly for less experienced traders. Maintaining a disciplined approach, potentially combined with clear risk management strategies, can potentially help mitigate this issue. The Bottom Line The Santa Claus rally is a fascinating seasonal trend, offering insights into how market sentiment and activity shift during the holidays. While not guaranteed, understanding these patterns can help traders develop their strategies. Whether you’re exploring seasonal trends in stock CFDs or other potential opportunities across forex and commodity CFDs, having the right platform is essential. Open an FXOpen account today to access more than 700 markets, four trading platforms, and low-cost trading conditions. FAQ What Is the Santa Claus Rally? The Santa Claus rally refers to a seasonal trend where stock markets often rise during the final week of December and the first two trading days of January. It’s a well-documented phenomenon, first identified by Yale Hirsch in the Stock Trader’s Almanac. While it doesn’t occur every year, Santa Claus rally history demonstrates consistent patterns, with the S&P 500 averaging a 1.3% gain during this period. What Are the Dates for the Santa Claus Rally? The Santa Claus rally typically covers the final five trading days of December and the first two trading days of January. The Santa Claus rally in 2024 starts on the 24th of December and ends on the 2nd of January. During this period, stock markets will be closed on the 25th (Christmas Day) and the weekend of the 28th and 29th. How Many Days Does the Santa Claus Stock Rally Take? The rally spans seven trading days: the last five of December and the first two of January. While its duration is fixed, the intensity and consistency of the trend vary from year to year. Is December Good for Stocks? Historically, December has been one of the strongest months for stock markets. Positive sentiment, strong retail performance, and tax-related portfolio adjustments often contribute to this trend. Is the Stock Market Open on Christmas? No, US and UK stock markets are closed on Christmas Day, with reduced hours on Christmas Eve. Historically, What Is the Best Day of December to Invest in the Stock Market? Financial markets bear high risks, therefore, there is no best day for trading or investing. According to theory, in December stock market history, the last trading day of the year has often been among the strongest, as investors position portfolios for the new year. However, results vary based on broader market conditions and a trader’s skills. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOPEN:SPXMEducation
by FXOpen
6
SMCI: Stock Split with Chart UpdateSMCI had a stock split, so I have to update this chart. Light Fundamental: It is a stock called SMCI (or Super Mico Computer). It is a US company that makes super powerful computers and servers. The world needs servers to help run things like big websites, apps, and AI. The stock price fell by half. So, it is selling at a discount for what it is really worth. So, it is a good chance to buy it. Technicals: Gartley-like pattern diagonal support engulfing bullish pattern with d3 volume and volume confirmation a-b-c completion at a 78.2% fib pullback Entry is above the weekly engulfing bullish candle at 475.44. Target is, tentatively, 1500. Note: preparing for either an election rally or a Christmas rally in stocks
NASDAQ:SMCILong
by Rocketman
SMCI Bottom and Christmas Rally To ComeLight Fundamental: It is a stock called SMCI (or Super Mico Computer). It is a US company that makes super powerful computers and servers. The world needs servers to help run things like big websites, apps, and AI. The stock price fell by half. So, it is selling at a discount for what it is really worth. So, it is a good chance to buy it. Technicals: Gartley-like pattern diagonal support engulfing bullish pattern with d3 volume and volume confirmation a-b-c completion at a 78.2% fib pullback Entry is above the weekly engulfing bullish candle at 475.44. Target is, tentatively, 1500. Note: preparing for either an election rally or a Christmas rally in stocks
NASDAQ:SMCILong
by Rocketman
XRP to breakout to 0.87 for XMAS 12.25.2023 XRP/usdNot sure why there is such low volume on CRYPTOCAP:XRP but the sentiment is still the same IMO. The Crypto winter is HERE I think XRP is potentially being manipulated by the alphabet boys SEC. CRYPTOCAP:BTC is in an upward channel to test 50K CRYPTOCAP:ETH has broken out to test 2500 Why is CRYPTOCAP:XRP so stagnant??? We have taken out the sub .60 lows, and tested .70 2x in NOV The confluences are aligning and its only a matter of time before the impulsive bull run. .81-.87 is the target which is is 1:5 Risk:Reward ratio as posted. LOAD THE BUS we going NORTH! *This is not Financial advice, simply my own analysis and opinion DYR* #XRPtotheMOON
BITSTAMP:XRPUSDLong
by chestephens1
5
Bitcoin Bulls Charge Ahead: Whales Bet Big as 50K Looms—A Quick Analysis for a Memorable Christmas Rally In the fast-paced world of cryptocurrency, breaking news often arrives quicker than the giant whales themselves. As the year draws to a close, all eyes are on Bitcoin's soaring trajectory, with a tantalizing 50K milestone seemingly within reach. A swift analysis, guided by professional trader insights, unveils a compelling narrative for a Christmas rally that could make this the most memorable festive season of the new decade. Recent Bitcoin options data has sent shockwaves through the market, revealing that whales—the significant players with deep pockets—are placing hefty bets on a 50K BTC surge. The strategic positioning of these market behemoths has set the stage for a potential bull run that could materialize by the 26th to 27th of December, creating a buzz of excitement and anticipation. Professional traders , armed with their arsenal of technical analysis, are pointing to key indicators that suggest a substantial upward move for Bitcoin. The market sentiment is buoyed by the prospect of institutional investors and whales influencing the price action, providing a robust foundation for the projected surge. The options market , as detailed in a recent report by CoinTelegraph, acts as a barometer for these whale-sized bets. The strategic use of call options—financial instruments that give holders the right to buy an asset at a predetermined price—indicates a bullish outlook among these influential market players. This calculated move, coupled with the historical significance of the 50K threshold, adds weight to the analysis. Bitcoin enthusiasts and investors alike are eagerly anticipating what could be a historic Christmas for the cryptocurrency market. If the projections hold true, witnessing Bitcoin reach the 50K mark would not only mark a milestone for the leading digital asset but also create lasting memories for enthusiasts, traders, and investors as they toast to the end of the year and the beginning of a new era in the crypto space. In conclusion, the confluence of strategic whale maneuvers, professional trader analyses, and the impending holiday season paints a compelling picture of a Bitcoin rally to 50K by the 26th to 27th of December. As the crypto community braces for a potentially historic moment, the news of this impending surge may have arrived quicker than the whales themselves, setting the stage for a Christmas celebration that will be etched into the annals of cryptocurrency history.
COINBASE:BTCUSDLong
by wikitrades
1
Black Friday Buzz for AMZNThe Giant of e-commerce and AWS for small businesses, which now has AI integrated, is moving up in anticipation of a strong Black Friday for $NASDAQ:AMZN. The new CEO who took over form Jeff Bezos is doing a good job. As the CEO of the AWS division, he did an amazing job building that division of AMZN. Outstanding CEOs make a company great. CEOs are more important than most investors realize. Weekly Chart shows that AMZN is about 40 points from its all-time high, so plenty of opportunity for it to move up further from here. The Blue lines indicate levels where Dark Pool buy zones and Pro traders moved in most heavily. These are now strong support levels for the stock.
NASDAQ:AMZNLong
by MarthaStokesCMT-TechniTrader
Right Inverted ShoulderH&S Inverted Pattern plays out. rejected 4100. This intense two day selling move looks and feels impulsive. Still could play out as an ABC but in this bear all the downs have been impulsive 5-waves. Being long is hi-risk imo. So this is just Wave 1. A bull trap is coming for a day or two. FOMC likely trigger for the 3rd Wave, final target 3660. After TL break, retrace up wave after first move down is typically a 0.62 retracement, could pivot sooner at .382 or 0.50. IMO The Grinch will be running holidays and Santa will come late to this party, or not at all. Don't count on seasonality. Top is in IMO. Look at Dec 2018. Get it? Good. Coal in all your stockings! GLTA
TVC:SPXShort
by DaddySawbucks
27
New SPY Cycle Patterns Headed Into Christmas 2022Pay attention to the very real possibility that the current GAP will be filled early this week as price attempts to find a base/bottom after last week's selling. I expect moderate volatility and a change of trend as we move closer to Christmas. Initially, we'll see some moderate downward price pressure, then we'll see a shift upward near the end of this week. 12/18/2022 Inside-Breakaway 12/19/2022 POP 12/20/2022 12/21/2022 Top/Resistance 12/22/2022 Flat-Down 12/23/2022 MntmRally-012 12/24/2022 GapUp-Lower Remember, stay protected and stay safe as volatility may be excessive over the next few weeks. 2023 looks very interesting. Follow my research to learn more.
AMEX:SPYLong
by BradMatheny
A Santa Claus Rally for the JSE in 2022? What is expected from a Santa Claus Rally? The Santa Claus rally, is essentially where we see stock prices locally and globally rise and close off positively by the end of December. And so, we can expect a rally in December which we can all profit from… Why December? We aren’t 100% sure but we have some speculations on why the market tends to rally… #1: Investment managers cut down on their taxes This is the time when you’ll see investors and investment managers, selling their stocks to lock in tax reductions before the end of the year. Once they sell their positions, they then buy other stocks and markets that they believe will rally in the next year. The buying of these stocks, leads to a rise in stock prices which pushes the stock market indices up. Theory #2: Investors enjoy their bonuses by buying into investments Investors also like to spend their bonuses on investments like stocks… And when they buy, demand picks up. And this leads to higher stock market prices. Speculation is one thing. But nothing confirms a Santa Claus Rally more than proof in the charts… The JSE has gone up 14 out of 19 Decembers! What you see, is the monthly JSE-ALSI stock market chart since 2003… Looking at the chart you can see how each December (Vertical blue line) performed from 2003 up ‘till 2021 Year Gain/Loss Year Gain/Loss 2003 : 7.39% 2004 : 1.28% 2005 : 6.84% 2006 : 3.90% 2007 : -4.99% 2008 : 0.51% 2009 : 2.62% 2010 : 6.69% 2011 : -3.26% 2012 : 2.72% 2013 : 3.27% 2014 : -0.53% 2015 : -1.15% 2016 : 0.48% 2017 : -1.33% 2018 : 4.63% 2019 : 3.51% 2020 : 3.83% 2021 : 4.66% So, there’ve been 14 out of 19 Decembers (74% win rate) that have shown positive gains. And in total, the JSE has accumulated 41.07% gains in all of those Decembers. This means, you have a higher chance of profiting from buying this Christmas than selling. And right now, this December the JSE ALSI 40 is already up an insane 14.48% gain. And I am seeing no signs of a slow down yet… I guess a Santa Claus rally is more likely than not, but we have had three to four winning years in a row... Things are looking good for now but the month is young... Do you think we will have a JSE Santa Claus Rally? Let me know. Trade well, live free. Timon MATI Trader
TVC:SA40Education
by Timonrosso
1
BE READY FOR CHRISTMAS RALLY! BUY THE DIP!!!!Hello everyone, if you like the idea, do not forget to support it with a like and follow. Welcome to this Total M.cap update. Total M.cap looks good here. Breaks out from the descending channel. Expecting a retest from here and that retest will be a good buying opportunity. I'm expecting a good rally in the crypto market before Christmas. Most people are still expecting new lows of BTC but IMO first we might see a short-term rally in the market from here. Expecting BTC to go $19k-$20k from here. Invalidation:- Any 4hr candle close below $770B What do you think about this? Do you also think that we might see a good bullish rally in the month of December or do you think this is just a trap? Share your views in the comment section. Thank You!
CRYPTOCAP:TOTALLong
by CoreCrypto1
13
Simple RSI/FIB Price System - BITCOIN BULLISHI've taught this system to hundreds of people over the past few years. It is a simple HIGHER HIGH/LOWER LOW system based on RSI 60/40. It is great for making decisions about longer-term trending and you can apply short-term technical analysis tools to 4 hour or other intervals to catch shorter-term trends. BITCOIN is BULLISH using this system. In fact, I would not be surprised to see $29k to $32k before the end of 2022. The BASE/BOTTOM appears to be already in place and now we are simply waiting for some of that Christmas Rally momentum to push BITCOIN higher. Follow my research and learn how I can help you stay ahead of the biggest market trends.
BITSTAMP:BTCUSDLong
by BradMatheny
Total Contrarian Trade/SetupAs much as I believe in "Don't Fight The Fed", I'm starting to think the bottom for the US markets (Technology/SPY/QQQ) may be much closer than some people think. My cycle research suggests a 2022.5 cycle pattern (late in the second half of 2022) is highly likely. Have we seen that yet? Maybe. Maybe it is the recent bottom in June 2022 and the change of direction (higher) after that bottom. Here are some of the KEY CYCLE PATTERNS that catch my attention. 9-27~10-8 : Harami, CRUSH, Gap, Top, Consolidation, Temp Bottom, Gap Reversal, Breakdown, Breakaway, Rally, Carryover, Bottom 10-11~10-25: Inside/Breakaway, Harami, CRUSH, GAP, Gap Reversal, Breakdown, Breakaway, Carryover, Temp Bottom, Top/Resistance, Consolidation, CRUSH, GAP, BIG GAP These patterns, and the fact that I'm seeing some strength in the consumer sector, align with a potential Elliot Wave setup that suggests we may see some extreme volatility as we shift into a moderate Christmas Rally Phase. It all depends on HOW DEEP (if anything) we see the markets move after the Fed rate decision. If the markets fall back into bullish trending and attempt to move away from lower support levels, then there is a very solid chance we may see an extended Bullish price trend starting a new Christmas Rally phase - possibly lasting into Q1:2023. The CRUSH patterns are the only thing that concerns me. These are typically very aggressive downward price moves - but can sometimes represent pullbacks in an uptrend. I've seen them happen in very strong uptrends and I'm thinking capital may be shifting away from the same risks that were in the markets in late 2021. We've seen technology and other sectors fall 45% to 76% in some cases. The contrarian trade (bullish if support holds) may be a very low risk trade right now.
NASDAQ:QQQLong
by BradMatheny
BTC/USD: A Christmas Weekend Study FUNDAMENTAL BACK-DROP *Imho, if there was ever a time to expect fireworks, it's right now. *Weekend trading session for the next ~2 days. Institutions and majority of players are offline for Christmas day and/or weekend. Perfect environment for fuckery. *US holidays, and Christmas in particular, are proven to be powerful market events. (Often see pivots in price/sentiment through these windows). *"Buy when it snows, sell when it goes." - it's that time of year! **Recent CME event (listing ETH micro futures ) on Dec. 6 **Positive reaction from most recent FOMC meeting on Dec. 15 **Recent full moon phase change on Dec. 20 LOWER-TIME-FRAME TECHNICAL ANALYSIS *Structurally, price is trading within a megaphone pattern (making higher highs and lower lows). This implies high volatility in both directions until the megaphone is resolved. *Certainly trading against some key highs right now (top end of the range). In good shorting/selling location right now for people who think this rally into Christmas is bulslhit. HIGHER-TIME-FRAME TECHNICAL CONTEXT *Price is coming awfully close to triggering a major double bottom , drawn off the 1D chart. (The counter-trend rally high following Dec. 4 liquidation cascade). *$51,995 is the level to watch. I'm officially "uber-bull" if we start closing above this level. *Bullish momentum divergence confirmed ( MACD ) and continuing to build on the 1D chart. -- LIKE THE ANALYSIS? Send me a DM . I'd like to build a community of half decent traders and technicians.
COINBASE:BTCUSD
by bitflip01
1
Worst vs RestI was following the x4 OPEX closely last week because options are the market. The amount of QE liquidity in options over the past 2yrs has been distorting this bull trend for 2 yrs but also causes predicable dips during OPEX. So it wasn't a surprise Thu-Fri Dip to 20 50 EMA was this predictable. The only question now remains. Do we rally back next week OR does the real correction start? Most of the evidence I observe points to a rally. But there is a mounting case for further correction to the downside. Further downside would trigger liquidations and amplify bull capitulation. Next week is THE week. Christmas Rally or Coal. Choose a side.
NASDAQ:PENNLong
by SPYvsGME
4
ES - Volatility Contraction PatternExpanding on the Volatility Contraction Pattern trade into XMAS. 1. Strong Underlying Demand Elevated Relative Volume compared to prior days’ average A premarket gap or explosive move off the open The potential for a breakout on higher time frames Underlying significant support (20D-50D moving average) Inability to breakdown 2.Recent Overbought / Supply Pressure Higher lows Extreme price contraction on low volume 3.Diminishing Suppy Characteristics Begin to see the wave tightening Consolidation into 20D,50D Moving Average 4.Decreasing Volatility 5. Explosive Breakout (TBD) !!!Not Trading Advice. Just a Bag Holder!!!
CME_MINI:ES1!Long
by SPYvsGME