Trading term

What is Santa Claus rally?

The Santa Claus rally is the tendency for stocks to rise over the last five trading days of December and the first two of January.

Yale Hirsch named it in the 1972 Stock Trader's Almanac. It's seven trading days long, and it's measured from the close before the first of them.

Unlike most calendar patterns, it holds up. From 1950 to 2025 the S&P 500 rose in 58 of 76 Santa Claus rallies, with a median gain of 1.2%. That made it the best 7-day stretch of the year, and a shuffle test shows luck rarely produces a week that good.

For example

The rally missed in 2023, 2024 and 2025, its first three-year losing run since 1950. The S&P 500 still rose 23% in 2024 and 16% in 2025.

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Why it matters to you

It's one of the few calendar effects that passes a luck test. But it's small, it has weakened since the late 1980s, and a missed rally hasn't been a reliable warning of a bad year.

⚠ Reading a miss as a sell signal

The Almanac's rhyme says bears follow a missed rally. After 17 misses with a known next year, the S&P 500 still rose the following year 12 times.

Frequently asked questions

When is the Santa Claus rally?

From the fifth-last trading day of December to the second trading day of January. In 2026 that's 24 December to 5 January.

Is the Santa Claus rally real?

For the S&P 500 since 1950, yes. It rose in 58 of 76 years, against 58% for a typical 7-day window. It's weaker than it was: 31 of 38 up before 1988, 27 of 38 since.

Read the full guide

How markets workIs the Santa Claus Rally Real? Every One Since 1950, TestedThe S&P 500 rose in 58 of 76 Santa Claus rallies since 1950, the best week of the year. But it's fading, and it missed in 2023, 2024 and 2025.8 min read

Related terms

All-time highAn all-time high is the highest price a market has ever reached. Traders often measure it by the closing price, so one brief spike doesn't count.Anchored VWAPAnchored VWAP is a volume-weighted average price that starts from one candle you choose, rather than resetting at the start of each session. You anchor it to a meaningful event — an earnings gap, a major low, a breakout — and it tracks the average price everyone has paid since.APY (annual percentage yield)APY is the rate you actually earn over a year once your interest starts earning interest of its own. It's the same money as the quoted rate, just counted properly: 5% APR compounded monthly works out to 5.1162% APY.Ascending triangleAn ascending triangle is a bullish continuation pattern: a flat horizontal resistance line on top, with a rising trendline of higher lows beneath it. As the higher lows squeeze price against the ceiling, pressure builds — and it usually resolves with a breakout up through the resistance.
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