Santa Claus Rally failure (Preview)

By Lawrence G. McMillan

Much of what is written below was written a year ago, when the Santa Claus rally also produced a loss.  At that time, $SPX rallied immediately from there and never looked back.  But the analysis is still valid.

When the typical Santa Claus Rally seven day trading period produces a loss, it is generally a short term problem for stocks.   This was stated, poetically, by the system’s creator, the late Yale Hirsch: “If Santa Claus should fail to call, bears may come to Broad and Wall.”