The Santa Claus Rally Finally Appears!

Dec 23, 2015: 12:09 PM CST

It’s about time! The famous “Santa Claus Rally” occurred this holiday week.

Many traders were asking “when will the rally occur?” and we have our answer mid-week.

Let’s chart the Santa Claus Rally of 2015 and what factors set it up ahead of time.

Here’s the Daily S&P 500:

Here’s some background of what I wrote this week to Members (we’d love to have you as a member):

Monday:  “We’re going to play a long/bullish bounce aggressively “up away from” the 2,000 pivot. The target will be 2,045 or 2,050 on the bounce.”

Tuesday:  “We’re likely playing into the “Santa Claus” Rally, but beyond that, price was expected to trade higher “up away from” the 2,000 pivot support with positive divergences. That’s precisely what happened and we’re going to continue trading any long/bullish upside price action into Wednesday and beyond.”

We’re seeing the outcome so far of the successful planning/analysis for price moving “up away from” the 2,000 pivot during the shortened holiday week.

The factors that preceded the rally included…

  • A Key Support Pivot (2,000)
  • Positive Momentum and Internal (Breadth and TICK) Divergences (suggesting a reversal)
  • The “Santa Claus” or bullish historical tendency for the Christmas holiday trading week
  • The Larger Uptrend in the Market

Ultimately that’s precisely what occurred.

Here’s what we have of the rally so far as seen on the 30-min Intraday @ES Futures Chart:

We can see the Positive Momentum and Breadth Divergences occurring into the 2,000 Key Pivot Support.

That’s enough to make us bullish and expect a rally swing “up away from” this pivot.

However, the “Santa Claus” bullish historical tendency further put the odds in our favor.

It’s not always clear what price “should” do AND we get the expected follow-through.

When that happens, be sure to take advantage of it with aggressive trading strategies, particularly intraday.

Afraid to Trade Premium Content and Membership

Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.

Corey Rosenbloom, CMT
Afraid to

Follow Corey on Twitter:

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


4 Responses to “The Santa Claus Rally Finally Appears!”

  1. Stellar Bullish Trend Day Update and Surging Stock Scan Dec 23 | Afraid to Blog Says:

    […] take a look at this morning’s update “The Santa Claus Rally has Arrived!” for more […]

  2. Brian Says:

    Better later than never right? 🙂 Let’s see how the “January effect” pans out.

  3. Gotta Watch this Important Trendline for the SP500 | Afraid to Blog Says:

    […] The bullish fly in the bearish ointment is the shortened holiday week ahead of New Years following last week’s “Santa Claus Rally.” […]

  4. Sachin Says:

    Santa Claus might have appeared, but it still depends if we keep the benefit last, it is very common to see people destroying all the previous benefits. I am always trying to maintain consistency, as that is how we will get success without which we won’t reach far. It is easier for me to do things thanks to OctaFX broker and their great benefits with low spreads of 0.2 pips for all major pairs and even really smooth trading platform to work on.