It has been a rough month.
We had the worst start for December since the Great Depression. And stocks continued lower after the latest Federal Reserve meeting.
That bearish sentiment could change as we head into what's been known as the Santa Claus rally. While some have considered the Santa Claus rally to occur throughout the entire month of December, volatile years like this have shifted that focus to simply the six trading days after Christmas being the bulk of the rally. This year, that will be December 26 through January 3, since the market is closed New Year's Day.
Tracking the Dow Jones Industrial Average since 1896, when the index was first created, it has increased 76% of the time over these six days. We can't simply ignore a historical trend with 76% accuracy that sees gains 10 times a normal six-day period.
After an extremely volatile month, look for Santa to bring investors a gift, and somewhat salvage what has been a turbulent year.
