There is a very old saying on wall street, “If Santa Claus should fail to call, bears may come to broad and wall”. Studying the Santa Claus rallies since 1969 stats show that in almost every case where there was not a “Santa Claus Rally”, the market in less than a year was entering a bear market.
The Santa Claus rally run for the last 5 days of December and the first 2 trading days of the new year are not at all encouraging.
In this article I review the 2014 Santa Claus Rally and then look at what “Santa” could be telling investors. We will then review some past failed Santa Claus rallies to see what can be learned from those failed rallies and the months that followed. Finally I review 9 tips I use to stay profitable in the face of what could be the start of the next bear market.
2014 Santa Claus Rally
The Santa Claus Rally in 2014 lost over 60 points on the S&P for a fall of 2.9%. This marks the first Santa Claus Rally that failed since 2007.
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This article is important as I believe it lays out the basis for investing in 2015 to stay profitable and avoid what could be large losses. As such it is open to all FullyInformed Members.
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