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To Tell The Truth About Santa
Will the real Santa Claus Rally please stand up?
Richard Barkand
December 15, 2025
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THE BIG IDEA
“If Santa Claus should fail to call, bears may come to Broad and Wall.”
- Yale Hirsch, 1973 Stock Trader’s Almanac
The game show To Tell The Truth has been on TV on and off since the 1950s. For those not familiar, it goes like this: three contestants all profess to be the same noteworthy person, and a panel of celebrities has to guess which of them is telling the truth. One episode featured famous explorer Sir Edmund Hillary alongside two imposters claiming to be Hillary, for example.
At this time of year, every year, there is a lot of chatter about “a Santa Claus rally” in the stock market.
It doesn’t take much; two consecutive positive days in December is enough to get people grinched up about a Santa Claus rally.
The thing is, there is a big difference between “A” Santa Claus rally and “THE” Santa Claus rally.
For our money, the only real one comes from the original definition that inspired the term “Santa Claus rally” many decades ago.
Yale Hirsch was a long-time Wall Street analyst and founder of The Stock Trader’s Almanac. In the 1973 edition of his almanac, Hirsch observed that the stock market was frequently up during the last 5 business days of December and first two days of the new year. BTW, note that this period largely comes after Christmas. The average gain for those seven days, all the way up through last year, is 1.3%. Not bad!
Only one of them is the real Santa…
Most traders are unaware of this specific meaning of “the” Santa Claus rally. And even if they do know of it, they often miss the most valuable piece.
Go back and re-read that quote at the top of this post. I’ll wait here.
If the market doesn’t deliver a gain during those crucial seven days, a bear market is likely coming soon. It isn’t just some cute folklore. Even in this century, the relationship still holds true. Most famously, the lack of the Santa Claus Rally in 2000 and 2008 preceded especially rough periods for the market.
There was no official Santa Claus rally last year. Then the S&P 500 collapsed by 21.3% from the high on February 19 to the intraday low on April 7. Blame it on Donald Trump if you want, but Santa must have tipped off the good boys and girls about what was to come.
SEEN ON THE INTERNETS
When do you make money in the stock market? Well, it depends.
The market goes through phases where most of the money is made during regular market hours. Other times, it happens magically while we sleep. It also depends on the thing that you are trading.
Bespoke Investment Group last week provided this post where they showed that nearly all the money ever made in the most popular gold ETF came between Wall Street’s close to the next day’s open. Twenty years of data can’t be a fluke.
This is not a normal ETF, of course. The gold market is globally active and does not obey the opening and closing bells on Wall Street.
But it does serve as a reminder that you might find a recurring tendency in your stock/ETF of interest, even if it is not as one-sided as GLD.
NUMBERS ONLY
54 | The S&P 500 had 54 of its members make a new 52-week high on Thursday. That is the most new highs on a single day since July. |
- 3.27% | NVDA, everybody’s favorite stock to own/trade, was down 3.27% on Friday and had its lowest closing price of the month so far. |
$81.55 | The Prime Wave poked fun at General Motors a few weeks ago, but the stock made a post-bankruptcy high of $81.55 on Friday. |
SWINGEX INDEX
As of market close on: 12 December 2025
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Swingy says: How'd you like Friday? Yeah, me neither. But the index says there is more of that to come.
Learn more about how the Swingex Index works here.
WATCHER
Stocks highlighted here each week are not recommendations to buy or sell. They are provided as ideas for swing traders to follow up on with their own research.
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HLIO (Helios Technologies): While the market is behaving a little erratically with some stocks falling hard, some others are looking healthy. One that appears ready for a breakout is HLIO.
On the first chart, going back to the start of the year, you will notice the Trump plunge from earlier in 2025. The more relevant thing, though, is that the stock has been coiling up in the $50s for several months.
We zoomed in on just the last three months on the second chart. There, you can more clearly see (helped by our blue rectangle) that ever since the low of November 20th, there has been stronger volume on up days. It is subtle, but real.
Putting the two together, HLIO looks primed to spring higher in the near future.