Since World War II the S&P 500 Index has suffered a quarterly loss of over 10% nineteen times. As 2018 comes to a close the $SPX is working on its 20th such quarterly decline. Of course, this time could be different, but exiting the market because of a 10% quarterly loss has largely proven to be unwise.
That being said, is it too late for a Santa Claus rally? Actually, no.
What is a Santa Claus Rally
A Santa Claus rally describes sustained increases in the stock market that occur 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. Another theory is that some very large institutional investors, a number of whom 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.
Financial columnists typically opine on the likelihood of a Santa Claus rally. Some cite economic and technical analysis, and others offer pure conjecture.
We live in hope(not a strategy).
Hat tip Bespoke Research/Investopedia.com