To The Moon

Towards the end of the year, "year-end effect" has become a popular word in American stocks, both on Wall Street and in the eyes of investors, which to some extent has further encouraged investors' risk sentiment.

The so-called year-end effect refers to the market performance of the US stock market from Thanksgiving to Christmas( from November 28 to December 25). It can be seen from the comprehensive historical trend that December is often a good year for US stocks to make money.

According to investment research company CFRA:

The $S&P 500(.SPX)$ has gained an average of 1.6% during December, the highest average of any month and more than double the 0.7% gain of all months.

Since 1945, the US stock market has risen 75% of the time in the last five trading days in December and the first two trading days in January, entering the so-called "Christmas market". The average increase of the $S&P 500(.SPX)$ 's Christmas market since 1969 is 1.3%.

Cited from AlmanacTrader:

Typical December Seasonal Pattern Begins Dull Pops Mid-Month | Dec’s 1st trading day has been bearish last 21 years. Modest rally through the 5th or 6th trading day fizzled into mid-month. Then holiday cheer tends to kick in & propel indexes higher with a pause near month-end.

LPL Research added research:

December is widely known as one of the best months of the year for stocks, but most don’t realize that the majority of the gains happen in the second half of the month.

AlmanacTrader also pointed that:

From the statistic review of Last 18 midterm years since 1950, $DJIA(DJIA)$ and $S&P 500(.SPX)$‘s times to up in December were double than the times of Down in december. And $NASDAQ(.IXIC)$  shows the same possibilty to up or down in December. 

From the Average return the last 18 midterm years, the average return of $S&P 500(.SPX)$ , $DJIA(DJIA)$ ,$NASDAQ(.IXIC)$ are 1.2%, 0.9% and -0.3% respectively.

Small caps $IWM(IWM)$ tend to soften in midterm Dec. Since 1982, R2K lost ground just 3x in 10 midterm Dec avg gain 0.3%. Midterm Dec stronger prior to Dec 2018.

1. So do you believe there’s a good chance for a Santa Claus rally in December?
2. What stock will you hold to recieve Christmas gift as reward?