LATE DECEMBER – EARLY JANUARY RISE
By Staff Reporters
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RALLY: A rally is a period of sustained increases in the prices of stocks, bonds or indices … An increase in prices during a primary trend bear market is called a bear market rally. A bear market rally is sometimes defined as an increase of 10% to 20%.
Now, a Santa Claus Rally describes a sustained increase in the stock market that occurs in the last week of December through the first two trading days in January. There are numerous explanations for the causes of a Santa Claus rally including tax considerations, a general feeling of optimism and happiness on Wall Street, and the investing of holiday bonuses.
CITE: https://www.r2library.com/Resource/Title/0826102549
Another theory is that some very large institutional investors, a number of which are more sophisticated and pessimistic, tend to go on vacation at this time, leaving the market to retail investors, who tend to be more bullish.
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Filed under: "Ask-an-Advisor", Glossary Terms, Investing | Tagged: bull stock market rally, santa claus rally, window dressing | 4 Comments »