Chart of the Day - Friday, December 11th, 2020

Today’s Chart of the Day was shared on Twitter by Ryan Detrick of LPL Financial Research (@RyanDetrick). On average, December has been the second-best month for the S&P 500 over the past 70 years. Ryan points out that the seasonal tailwind doesn't really pick up until the second half of the month. As we know, there's no such thing as a sure thing on Wall Street, and the S&P 500 doesn't always follow its seasonal trend. Just take a look at what happened in December 2018! But with the S&P 500 trading firmly above its February and September peaks, it's not crazy to think that Santa Claus will come to town this year. The term "Santa Claus Rally" gets thrown around a lot, but it's often misunderstood. This phenomenon, popularized by The Stock Traders Almanac, strictly refers to the last five trading days in December and the first two trading days in January, in which the S&P 500 has enjoyed an average gain of 1.3%. In fact, it will be big a red flag if we don't get some sort of Santa Claus Rally during that seven-day stretch. As Yale Hirsch once famously said, "If Santa Claus should fail to call; bears may come to Broad & Wall."