What Is a Santa Claus Rally?

A Santa Claus rally describes a sustained increase in the stock market that occurs in the week leading up to December 25th. However, there is disagreement over whether these rallies happen in the week leading up to Christmas, or if it's the week after Christmas until January 2nd. Even the notion of seasonality coming to the rescue seemed far-fetched.

Sure, the patterns matched up well, but the three-month slide made the notion of seasonality quaint and unbelievable.

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