There has been an interesting shift in an old and treasured seasonality pattern. The fabled “Santa Claus” rally period has seemingly disappeared over the last five years.
Take a look at these two seasonality charts.
The first includes data from the 10 year period between 1999 and 2018. It shows the percent of months that the S&P 500 index closed higher than it opened. The index closed higher in December 70% of the time. The typical Santa rally effect.
The second chart highlights the most recent 5 year period. Now the percent of months that the S&P closed higher than it opened in December has dropped down to just 40%.
It appears that over the near term, the market has been naughty, not nice.