Everyone has heard the story about how the stock market generally rises in December. This phenomenon has been dubbed the Santa Clause Rally. But I wanted to know if the Santa Clause Rally really existed, or if the market was actually leaving us lumps of coal.

I took a look at the chart for the S&P 500 index and used Nirvana Systems Seasonality Module to see if there was any evidence of a Santa Clause Rally. I was surprised to find that not only was their evidence, but the market is downright bullish in December!

Since 1990, the S&P 500 has posted gains 77% of the time. Not only that, but the index averaged a gain of almost 2% - that's a holly jolly Christmas! In fact, December is the most bullish month of the year, beating the next most bullish month, April, by over 4%.

We're currently in the red in December of 2011, but if history is going to repeat itself, we could see a strong upward move to round the year.

JD

We thought it would be a good idea to let me post some educational content and abrasive comments on the market. We might be very, very wrong, but here we go! This first post is a test, and only a test. I'll try and post something of nominal interest in the near future.

JD