Chart of the Day - Thursday, December 22nd, 2022

Today’s Chart of the Day was shared by Ryan Detrick (@RyanDetrick). With the S&P 500 down -6.3% in December, it's getting harder to believe in Santa Claus this year. However, the real Santa Claus Rally period doesn't officially begin until tomorrow (Friday, December 23rd). This phenomenon, created by Yale Hirsch, refers to the last five trading days in December, and the first two trading days in the new year. Since 1950, the S&P 500 has closed higher over this seven-day stretch 79.2% of the time for an average gain of +1.33%. Many expect this rally as a sure thing and then dismiss it when it fails. However, they're missing the real signal. When the Santa Claus Rally fails, it has often signaled below-average returns the following year. Either way, there will be valuable information to be gleaned from how the S&P 500 performs over the next seven trading days. For more on this topic, check out this note from Ryan.