Today is the first day of December and it started with a bang up 249! One might ask: Is this the start of a Santa Clause rally?
Interestingly the Santa Clause rally you may hear talked about this month refers to the week AFTER Christmas and includes the first 2 days in January. Now this is not the "official" definition because there isn't one. But most industry experts agree that it is the week after Christmas and not the whole month that is part of a Santa Clause rally if one takes place.
Most people automatically assume that a Santa Clause rally is for all of December because that makes the most sense. It has been speculated that stocks go up then because people are more optimistic around Christmas and in a stock buying mood. It has also be attributed to people getting money as Christmas presents and/or Christmas bonuses and being more apt to buy stocks rather with that money.
December has historically been one of the best months for the stock market but nothing is ever guaranteed of course. Todays rise of almost 250 points is a great start but things can change fast in this economic environment.
Remember that there is always trouble around the corner and this year we see high tension between North and South Korea as well as some uncertainty in Ireland. We also just have news that 2 million people are about to lose their unemployment benefits so December could be a rocky month for stocks despite today's big gain.
