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Santa
Claus
Brian
Trumbore
President/Editor, StocksandNews.com
In the old days, the Santa Claus rally
in stocks was defined as the last five trading days
of the year and the first two in January. In more
recent times the period keeps getting moved up and
it's as if it now starts in November.
So
we'll compromise and look at the entire month of December,
instead, which also happens to be smack dab in the
middle of the best three months of the year.
For
the S&P 500, for example, since January 1950:
November?up
1.8%
December?up 1.7%
January??up 1.4%
For
Nasdaq, since inception in 1971:
November?up
2.2%
December?up 2.0%
January??up 3.7%
[Source:
2007 Stock Trader's Almanac]
I'm
throwing in the price of West Texas Intermediate crude
(WTI?the common barometer you hear of when someone
talks about the price of oil in the U.S.), because
December always proves to be a key month here as well
as traders jostle to figure out the future winter
weather pattern and the possible impact on inventories.
December
S&P
500?11/30 - 12/31?full yr. performance?WTI for Dec.
1997:
955 - 970?[+33.4%, total return]?oil N/A
1998: 1163-1229?[+28.6]?WTI: 11.28 - 12.05 [11/30
- 12/31]
1999: 1388 - 1469?[+21.0]?24.58 - 25.60
2000: 1314 - 1320?[-9.1]?33.83 - 26.83*
2001: 1139 - 1148?[-11.9]?19.48 - 19.78
2002: 936 - 879?[-22.1]?26.88 - 31.23
2003: 1058 - 1111?[+28.7]?30.33 - 32.55
2004: 1173 - 1211?[+10.9]?49.14 - 43.46
2005: 1249 - 1248?[+4.9]?57.33 - 61.04
*Back
in 2000, OPEC set a preferred price band of $22-$28,
but thanks to demand factors oil rose to the $35 range.
Western leaders, in particular President Clinton,
had been jawboning OPEC to add more supply to the
market to drive the price back down. Clinton was concerned
surging crude would hurt the candidacy of Al Gore,
and thus Clinton's legacy. By year end, votes already
cast (and contested), OPEC finally opened up the spigots
and you see the result.
[Reminder:
For any time period in question, since 1999, you can
always check my "Week in Review" archives for a look
at the overall environment back then.]
---
Days
of the Week
As
the "2007 Stock Trader's Almanac" notes, Monday used
to be the worst trading day of the week.
June
1952 - December 1989
S&P
500
Monday?.up
44.3% of the time
Tuesday??.51.6
Wednesday?57.0
Thursday??52.9
Friday???57.9
But
then the pattern changed, though the last five and
a half years Monday and Friday have battled it out
for worst-day-of-the-week status.
January
1990 - June 2006
Monday?.up
54.8% of the time
Tuesday?.?49.7
Wednesday?54.0
Thursday??50.7
Friday???53.6
Nasdaq
1971 - 1989
Monday??..41.1
Tuesday??..51.1
Wednesday?.62.7
Thursday??.64.2
Friday???..67.3
1990
- June 2006
Monday???52.6
Tuesday???51.4
Wednesday?...57.9
Thursday??...54.8
Friday???...55.4
Additional
Sources: StocksandNews.com archives, Energy Information
Agency
Wall
Street History will return next week.
Brian
Trumbore
The
securities markets are subject to the risks of fluctuating
prices and the uncertainty of rates of return and
yields inherent in investing and past performance
is no guarantee of future results.
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