Year-end/new-year indicators: progress report

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I posted a short piece on Christmas eve on the so-called Santa Claus Rally. Just to recap: “According to Jeffrey Hirsch (Stock Trader’s Almanac), the ‘Santa Claus Rally’ normally occurs during the last five trading days of a year and the ensuing first two trading sessions of the new year. During this seven-day period stocks historically tended to advance (by 1.5% on average since 1950), but when recording a loss, they frequently traded much lower in the new year.

December 24 marked the official start of the Santa Claus Rally period and yesterday the end. And the result is … the S&P 500 Index was up by 1.4% and the Dow Jones Industrial Index by 1.0%. So far so good.

Next up of the year-end/new-year indicators will be the “First Five Days Early Warning System”, the “January Barometer” and the “December Low Indicator” (see previous post for definitions). I will comment on these as we go along.

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