Do we believe in a Santa Claus rally?

Market Ethos.
November 28, 2022

The term ‘Santa Claus rally’ is a term coined over the years for a good reason. Data back over a century reveals that December has the highest probability of any month to be in the green for the TSX and S&P 500 – 77% and 76%, respectively. The average gain for the TSX at 1.9% is the highest among all months, while the S&P 500’s average of 1.4% is a close second place after July. This time of year is usually kind to equity portfolios.

With the TSX and S&P 500 charging ahead by 6% and 8% respectively in October, and up 5% and 4% so far in November, Santa certainly came early this year. This does raise the question though: will this Santa Claus rally make it all the way to Christmas? The holiday is a mere four weeks away, which does sound like it is quickly approaching (must start shopping soon). However, four weeks in this ‘bear’ market is a long time, and the market is already rather extended. The S&P 500 is once again bumping up against its 200-day moving average. The bear market rally of the summer months reached this measure as well before making an about-turn

Related articles

Market Ethos

Going for gold

May 29, 2023. Market Ethos. Gold remains a stone throw from a key resistance level despite cooling inflation and higher yields. If a recession is…

3 minute read

Market Ethos

Selling the tip

May 23, 2023. Market Ethos. In this week's Market Ethos, we discuss leaning more towards ‘selling the tip’, or perhaps ‘trimming the tip’. Shorter-term, maybe…

3 minute read

Market Ethos

The market is saying something

May 15, 2023. Market Ethos. When good news fails to lift markets higher, the market is saying something and we should all listen. In the…

3 minute read