The so-called Santa Claus rally is not off to a good start this year, but perhaps all is not lost yet.
After stocks fell Thursday and with their declines Monday, major averages are on pace to drop on the first two trading days of the Santa Claus rally. The rally is the tendency for stocks to rise over the last five trading sessions of December and the first two trading sessions of January.
Upon analysis of data provided by the Stock Trader’s Almanac from the past 46 years (since 1969), the S&P 500 has fallen on the first two days of the Santa Claus rally just four times (1987, 1998, 2002 and 2012).
However, giving Wall Street some hope, in each of those four years, the S&P 500 actually saw a gain over the period by the end of the seventh session of the Santa Claus rally period.