- CNBC’s Jim Cramer sees a Santa Claus rally this year despite the raging omicron variant that’s spiking Covid cases during the holidays.
- Cramer tweeted early Tuesday: “Historically today is the day the Santa Claus rally starts. It worked even during 2007-2009. So it is hard to doubt.”
- Later, on “Squawk Box,” Cramer said, “If you bought today and you just held on even for six days, you made money almost every single year.”
CNBC’s Jim Cramer said Tuesday he believes there will be a Santa Claus rally this year despite the raging omicron variant that’s spiking Covid cases during the holidays.
The seasonal stock market phenomenon has historically started around now and continued into the first days of a new year, the “Mad Money” host said, using a more liberal time frame for the Santa Claus rally.
“It is uncanny” how often this trend has worked, Cramer said on “Squawk Box,” citing the research of market historian Larry Williams. “It is hard to go against something that’s been right every time that’s made you money.”
Cramer tweeted early Tuesday: “Historically today is the day the Santa Claus rally starts. It worked even during 2007-2009. So it is hard to doubt.”
Later, on “Squawk Box,” Cramer said, “If you bought today and you just held on even for six days, you made money almost every single year.” He added, “It is a short-term trade, although then you start getting into positive seasonality in January.”
January has been a historically strong month for the stock market, informing the old Wall Street adage, “As goes January, so goes the year.” However, the S&P 500’s 1.1% decline in January 2021 did not dictate the year. Santa Claus rally or not, this year is poised for stellar gains, barring any huge declines. For all of 2021, as of Tuesday’s close, the Dow Jones Industrial Average was up 15.9%; the S&P 500 gained 23.7% and the Nasdaq Composite was up 19%.
U.S. stocks on Tuesday were rebounding in a rally that would break a three-session losing streak. “What’s interesting is that we’ve had this downturn and the Santa Claus rally would dictate that the downturn is now over,” Cramer said. For the month of December, the Dow is up 2.9%, the S&P 500 is up 1.8%, and the Nasdaq is down 1.2%.
It’s worth noting that there’s debate on Wall Street on the exact date the Santa Claus rally traditionally starts. According to the Stock Trader’s Almanac, it takes place over the last five trading days of December and the first two sessions of January. Santa no-shows on Wall Street tend to precede rough periods for stocks. The Stock Trader’s Almanac discovered this trend in 1972.
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Source: Investing - cnbc.com
