Food for thought as we prepare our strategies for 2017. The Santa Claus rally is specific to a seven day window from the last five days of the year plus the first two of the new year. It is actually used as an indicator for the year to come. The Stock Trader’s Almanac conveys, “since 1950 the S&P 500 has averaged 1.5% gains for that seven day period”. It may not look like much, but it has been significant enough to catch the attention of traders. Jeff Hirsch editor and chief of The Stock Trader’s Almanac has a fun jingle... ”if Santa Claus should fail to call, bears may come to Broad and Wall.”
If the end results on January 3rd are negative, it may not bode well for the year to come. If you don’t catch the rally, or if Santa Claus doesn’t come to call, you can use this indicator to set up your trades for the new year. Add this to a new strategy that has come to light, ”buy the election - sell the inauguration”.
Best wishes & good trading.
Series 3 Licensed
Senior Market Strategist
Laura began her career in the financial industry in 1981. In 1985 Laura and some former colleagues developed and organized a new IB division at Index Futures Group. With a partner, she named the division (Brokers Resource Corp.), developed the client base and supervised a staff that serviced guaranteed and non-guaranteed IBs located across the country. She developed the in-house procedures manual and conducted on-site compliance audits. I was also one of the original co-founders of the National IB Association (NIBA) and hosted the very first NIBA conference in Chicago.
After Index Futures Group sold their IB division Laura stayed on to manage the new accounts department as vice president of operations and then became their director of compliance. In 1996, as part of ED&F Man, Laura decided to venture into a new role in the commodity industry by putting her AP license to work by developing a client base as a commodities broker. Laura joined RJO Futures in 2011 where she enjoys being a senior commodities broker assisting clients with their trading decisions, the execution of their trades and specializing in automated trading for newsletter and hotline subscribers.