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Has The Santa Claus Rally Come Earlier?


6 December 2022

The Santa Claus rally is used to describe the continuous increase in in the stock market. This phenomenon usually occurs in the week leading up to Christmas, 25th December – hence the naming convention. However, there have been other definitions regarding this rally, with some people using it to describe the tendency for the stock market to increase in the last five trading days of the current calendar year and the first two trading days of the new year.  

With the market showing signs of an upward trend since 29th November 2022, many wonder whether the Santa Claus Rally came early this year. This article will explain some reasons for the ongoing market rally and whether the Santa Claus Rally might have come earlier this year. 

Understanding the Santa Claus Rally 

The Santa Claus rally was first documented by Yale Hirsch in “Stock Trader’s Almanac”. The Standard & Poor 500 Index pattern gained an average of 1.5% during the seven-day period from 1950 through 1971 in the five trading days of the year and the first two market days of the new year. To Hirsch, the rally serves as an indicator of the coming year for the stock market.  

Some factors causing the Santa Claus Rally 

Here are a few possible reasons to explain the stock market gains over the seven days trading period: 

These reasons stated above are just potential factors, traders should always do their due diligence before proceeding to trade. 

The Stock Market Rally in The Last Week of November 2022 

In the last week of November, the S&P 500 Index saw an increment of 122.48 points or 3.09%, at 4080.11. The Dow Jones Industrial Average saw a considerable raise of 737.24 points or 2.18%, at 34,589.77. This saw the markets close in the green on the last day of November. Traders are beginning to associate this lift in markets to the Santa Claus Rally happening earlier than anticipated.  

Reasons For The Stock Market Rally 

Here are some reasons for the potential rally that occurred at the end of November. 

Conclusion 

The end of November stock market positive results might signal an early start to the Santa Claus Rally, and there is an opportunity for potential opportunities and vice versa. Investors and traders can take advantage of this market opportunity that may present during this Santa Claus Rally with Vantage.  

Trade the world’ largest stock market indexes in the likes of S&P500 and DJ30 with low spreads and rapid-fast trade execution. Vantage also allows traders to trade on the moves of some of the biggest companies in the world with its share CFD offering.  

Open your live trading account in less than five minutes with Vantage to start US Stocks trading with CFDs. Vantage also offers $0 commission trading on all the US stock CFDs, allowing traders to maximise theirs trade whilst taking advantage of opportunities on both the long and short side. 

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