The thing about the Santa Claus rally is that people often use it improperly, according to “The Stock Trader’s Almanac” Editor-in-Chief Jeffrey Hirsch.
Hirsch has been the editor-in-chief since he took the role over from his father, Yale Hirsch, who started the almanac in the 1960s. He recently joined Benzinga’s #PreMarket Prep to talk about what seasonal trends he’ll be watching through the rest of the year.
The Santa Claus rally is the last five days of the year plus the first two of the next year, Hirsch explained.
“It’s a short thing: a period of time that’s just got a bullish bias -- not excessively. It’s about a 1.5 percent gain,” he said.
The importance of this seasonal trend is that if it doesn’t happen, Hirsch said, then something is awry.
“There’s a phrase that my father came up with: ‘If Santa Claus should fail to call, the bears may come to Broad and Wall,'” he said.
“We’ve seen that the last four times, either a flat year or a nasty bear market.”
Hirsch also talked about other trends to watch throughout the end of the year.
Check out his full interview here:
Don’t forget to tune in to Benzinga’s #PreMarket Prep broadcast Monday-Friday 8-9:45 a.m. ET for a live, interactive morning show with veteran traders and featured finance industry experts ready to answer your questions for the trading day.
Image credit: Andy Mangold, Flickr
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